JPM CO, 10-K, 1999-12-27

JPM CO
10-K, 1999-12-27
ELECTRONIC COMPONENTS, NEC

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 1999
--------------------------------------------------
or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________

Commission File No. 0-27738
---------------------------------------------------------

THE JPM COMPANY
(Exact name of registrant as specified in its charter)

Pennsylvania 23-1702908
---------------------------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

155 North 15th Street, Lewisburg, Pennsylvania 17837
---------------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (570) 524-8225
--------------------------

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.000067 par value

Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO __

As of December 6, 1999, 7,364,320 shares of Common Stock of the Registrant were
outstanding, and the aggregate market value of the Common Stock of the
registrant as of that date, as computed by reference to the last trading price
of such stock, excluding outstanding shares beneficially owned by directors and
executive officers, was approximately $32,514,000.

Portions of the proxy dated December 23, 1999 for the Annual Meeting of
Shareholders to be held on January 25, 2000 (the "2000 Proxy Statement"), are
incorporated by reference into Part III of this Report, to the extent specific
pages are referred to herein.

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 the 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. [ ]

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

(a) General Development of the Business.

The JPM Company (the "Company") was organized September 30, 1968 as a
recapitalization of a company originally founded in 1949 by Jay P. Mathias,
father of the current Chairman of the Board of Directors and Chief Executive
Officer, John H. Mathias and the current President and Chief Operating Officer,
James P. Mathias. The Company is an independent manufacturer of cable assemblies
and wire harnesses for original equipment manufacturers ("OEMs") and contract
manufacturers ("CMs") in the telecommunications, networking, computer and
business automation sectors of the global electronics industry.

The Company is headquartered in Lewisburg, Pennsylvania and operates
manufacturing facilities in Lewisburg and Beaver Springs, Pennsylvania; San
Jose, California; Columbus, Ohio; Bela, Czech Republic; Guadalajara, Mexico;
Toronto and Calgary, Canada; and Sao Paulo, Brazil.

In June 1997, the Company merged with Denron, Inc. ("Denron"), a manufacturer of
cable assemblies and wire harnesses in San Jose, California, in a transaction
accounted for as a pooling of interests, by issuing 791,170 shares of Common
Stock in exchange for all of the outstanding stock of Denron. This 10-K reflects
all historical and current information of the combined companies.

In August 1997, the Company, through its subsidiaries JPM Deutschland and JPM
Czech Republic, acquired substantially all of the assets of Corma
Elektrotechnische Productions GmbH, Leuchtenberg, Germany and Corma spol s. r.
o., Bor, the Czech Republic (collectively "Corma") for cash in the amount of
approximately $1,700,000.

In June 1998, the Company purchased all of the outstanding common stock of
Antrum Interface 725, Ltd. ("Antrum"), a manufacturer of cable assemblies and
wire harnesses with facilities in Toronto and Calgary, Canada for cash
consideration of approximately $16,500,000. This consideration does not include
contingent cash consideration of up to $4,500,000 which may be paid pursuant to
an earn out arrangement.

In November 1998, the Company purchased 60% of AF Datalink Equipmentos de
Telecomunicacaoes, Ltda., a manufacturer of cable assemblies and wire harnesses
in Sao Paulo, Brazil for $6,000,000 in cash, $2,000,000 notes payable in one
year and 256,000 shares of JPM stock worth $2,500,000 at the time of purchase.

(b) Financial Information About Industry Segments.

All revenue of the Company is generated from a single business segment: The
manufacture of cable assemblies and wire harnesses.

The Company is a leading independent manufacturer of cable assemblies and wire
harnesses for OEMs and CMs in the telecommunications, networking, computer and
business automation sectors of the global electronics industry. The Company
manufactures a wide spectrum of products which transfer power or transmit voice,
data or video within the OEMs' or CMs' equipment or to external connections.
Principal applications of the Company's products include computers, computer
peripherals, network routers and switches, self-service terminals (including
automatic teller machines), PBX switching equipment, cellular digital switching
equipment, industrial controls and medical electronic equipment. Substantially
all of the Company's business is contract manufacture of cable assemblies and
wire harnesses. By integrating its design and engineering capabilities with its
customers' product development activities, the Company customizes its products
to satisfy its customers' particular needs in a price-competitive manner.

Consistent with its marketing strategy, a substantial portion of the Company's
products are sold to a limited number of customers. The Company's strategy is to
focus on industry leaders in the telecommunications, networking, computer and
business automation markets with whom it can develop mutually beneficial
relationships. The Company continuously seeks to expand the number of products
it supplies to existing customers, as well as to develop similar relationships
with selected new OEM or CM customers within its targeted markets. Because of
the complexity of these relationships, sales cycles can be long, sometimes
taking up to 18 months or more to develop. The Company's operating results can
fluctuate significantly both annually and quarterly because of customers'
product life cycles and new product introductions by new and existing customers.
<PAGE>
To reduce costs, enhance responsiveness to customers and improve manufacturing
processes and systems, the Company streamlined its management structure and
achieved ISO 9002 certification in its Pennsylvania, California and South
Carolina (closed in 1998) manufacturing facilities during fiscal 1993 and 1994.
In addition, in those years the Company implemented a training program designed
to provide technical, quality and problem-solving skills to all employees and
upgraded and expanded the Company's management information systems. All of the
Company's subsequent acquisitions have also been ISO 9001 or 9002 certified and
implemented training programs as described above.

(d) Manufacturing.

The Company manufactures substantially all of its products on a build-to-order
basis and to the forecasts of its customers. The Company operates manufacturing
facilities in Lewisburg and Beaver Springs, Pennsylvania; Columbus, Ohio;
Toronto and Calgary, Canada; San Jose, California; Guadalajara, Mexico; Sao
Paulo, Brazil; and Bela, Czech Republic and has manufacturing services
arrangements with companies in Taipei, Taiwan; Northern Ireland and in the
People's Republic of China. During 1999, the Company increased its manufacturing
capacity with the construction of new production facilities in Bela, Czech
Republic (40,000 sq. ft.) and Guadalajara, Mexico (60,000 sq. ft.). Each of the
Company's manufacturing facilities is capable of producing most of the Company's
products. During 1999, the Company initiated projects to add new production
capabilites at its Beaver Springs and Guadalajara manufacturing facilities. In
Beaver Springs, the Company is installing equipment for the production of single
mode fiber optic cable. In Guadalajara, the Company is implementing the
production of high performance copper cable. Both of these projects are expected
to be operational during the year ending September 30, 2000. The Company
maintains rapid prototype capabilities at each of its plants for designing and
developing customized products for its customers.

The vast majority of the Company's products are manufactured by cross-trained,
customer-focused teams working in cells or on continuous flow manufacturing
lines. This team approach enhances quality, responsiveness and flexibility,
permitting the Company to meet customer requirements for shorter lead times and
greater scheduling flexibility. The teams support customer just-in-time
inventory shipment requirements, including bin replenishment programs, and allow
direct shipments to installation sites with cables packed in order of use for
ease of installation. Each team prioritizes its own workload, balancing issues
of set-up, economic lot sizing, operator skills availability, equipment
scheduling and material availability with customer delivery requirements.
Cross-training of employees is an integral feature of this team approach. All
members of the production teams receive quality skills training focusing on the
benefits of statistical process control techniques that may be applied on
critical processes in their respective work areas. Manufacturing engineering
teams also evaluate process capabilities through statistical data analysis and
capability studies.

The Company emphasizes quality assurance systems throughout its operations.
Except for the Columbus, OH facility opened in 1999, each facility is
Underwriters' Laboratory listed, approved by the Canadian Standards Association
and ISO 9000 certified by an independent accreditation organization. ISO 9000 is
part of a standard developed by the International Organization for
Standardization, a worldwide federation of national standards bodies which
establishes a framework for structuring and documenting operations.

The Company is subject to a variety of foreign, federal, state and local laws,
rules and regulations relating to, among other things, the health and safety of
its work force, emissions to the air, discharge to waters and the generation,
handling, storage and transportation of waste and other materials. The Company
believes that it is currently in compliance in all material respects with such
laws, rules and regulations.

(e) Marketing.

The Company's sales and marketing efforts are focused on identifying and
satisfying customer needs and supporting the customer relationship on an ongoing
basis. The Company's sales and marketing efforts are focused on its major
customers through its Global Business Development Group and its Global Business
Directors. The Company seeks to develop extensive working relationships with its
customers through customer focus teams comprised of sales, quality assurance,
engineering, purchasing, and manufacturing personnel and customer service
specialists working collectively to focus on customer satisfaction. To
strengthen its market penetration and customer relationships in key geographic
regions, the Company establishes customer support teams, consisting of sales
personnel, design engineers and production planners. The teams enable the
Company to assist customers in the design and redesign of cable assemblies and
wire harnesses and provide additional production planning and control services
at the customer's site, thereby reinforcing and enhancing the Company's
responsiveness to the customer's needs and providing a greater level of support.

The Company's sales cycle with respect to new customers normally is an extended
process pursuant to which the OEM or CM qualifies the Company as a supplier.
This process typically involves exchanges of information through written
surveys, presentations, site visits, formal audits, sample quotations and first
piece builds. At the same time, the Company conducts research regarding the
OEM's and CM's organization and seeks to establish contacts at multiple levels
within that organization. This cycle can take 18 months or more from the initial
contact to the first production order. For existing customers, the Company seeks
to expand its sales through multi-level relationships with design engineers and
other decision-makers within the OEM's or CM's organization. During 1999, the
Company increased its engineering staff and expanded its product development
efforts to provide solutions to customer requirements and maximize use of the
Company's intellectual property. The Company filed its first patent application
in October 1999.

The Company's sales and marketing programs are directed by Senior Vice
Presidents of Global Business Development who are responsible for the growth of
the customer base and acquisition of new customers. They manage seven Global
Business Directors who are responsible for the growth and support of individual
customers or industry segments. The Global Business Directors are supported by
customer service specialists in the Company's nine manufacturing facilities and
application and design engineers who provide product development and design
engineering support locally to the Company's customers.

During the fiscal year ended September 30, 1999, sales of the Company's products
to Nortel, IBM, Hewlett-Packard and Lucent represented 28%, 14%, 11% and 11%,
respectively, of the Company's total sales. During the fiscal year ended
September 30, 1998, sales of the Company's products to Nortel, IBM,
Hewlett-Packard and Diebold represented 21%, 16%, 13% and 11% respectively, of
the Company's total sales. During the fiscal year ended September 30, 1997,
sales of the Company's products to Diebold, Nortel, IBM and Hewlett-Packard
represented 17%, 16%, 14% and 10% respectively, of the Company's total sales.

During the last three fiscal years, sales to customers in the
telecommunications, networking, computer and business automation sectors of the
global electronics industry represented the following percentages of the
Company's net sales:

<TABLE>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Telecommunications 43% 35% 24%
Computer 39% 41% 41%
Networking 5% 9% 14%
Business Automation 13% 15% 21%
------ ------ ------
100% 100% 100%
</TABLE>

(f) Competition.

The Company operates in an international market characterized by intense
competition. While the Company does not believe that any of its competitors
provides the breadth of product line and services with the quality and at the
prices offered by the Company, competition within particular portions of the
Company's business comes from a broad range of companies. Several of the
Company's competitors are much larger and have greater financial, management and
marketing resources than the Company. In addition to other independent
manufacturers of cable assemblies and wire harnesses, the Company's competitors
include contract manufacturers and manufacturers who are primarily connector
manufacturers and who compete primarily on the basis of having certain
proprietary connector technology. Competition within the industry is primarily
based on the combination of quality, production capacity, breadth of product
line, engineering support capability, price, local support capability, delivery,
packaging, systems support and financial strength.

(g) Backlog.

The Company estimates its backlog at September 30, 1999 and 1998 was
approximately $68,718,000 and $52,902,000 respectively. The Company does not
include within backlog non-binding, extended purchase orders and contractual
arrangements in which final authorization and shipment dates have not yet been
specified. Substantially all of the September 30, 1999 backlog is expected to be
shipped during the following six months. Because of customers' and the
industry's movement to just-in-time and pull systems, the Company's backlog at
any particular date is not necessarily representative of the Company's level of
business to be expected in the ensuing period.
<PAGE>
(h) Employees.

As of September 30, 1999, the Company had approximately 3,400 full-time
employees, including approximately 2,698 production operators, 397 in
engineering and other manufacturing support functions, 186 in executive, finance
and administrative functions, 72 in sales and customer service functions, and
107 in materials management functions. The Lewisburg, Guadalajara, Beaver
Springs, Columbus, Toronto, Calgary, San Jose, Bela, Lecutenberg and Sao Paulo
facilities have approximately 543, 1,615, 349, 14, 304, 46, 376, 147, 13 and 52
full-time employees, respectively. At the Guadalajara Facility, approximately
250 full-time and 689 temporary production employees are members of
Confederacion de Trabajadores Mexicanos (the Confederation of Mexican Workers)
and are covered by a collective bargaining agreement that is negotiated
annually. None of the Company's other employees are union members or are covered
by a collective bargaining agreement. The Company has never experienced a labor
strike or other labor-related work stoppage. Periodically, during times of
increased production, the Company employs temporary employees, who may
constitute 10-25% of the total employees at a facility. The Company considers
its relations with its employees to be good.

(i) Proprietary Information.

The Company relies on trade secrets and other unpatented proprietary information
in its operations. While the Company believes that it has developed certain
proprietary production methods, there can be no assurance that others will not
develop similar or better methods. The Company's senior management and all
employees involved in product design and development have entered into
confidentiality agreements, and the Company seeks to enter into such agreements
with its customers and suppliers as it deems appropriate. There can be no
assurance, however, that such agreements will effectively prevent disclosure of
the Company's confidential information.

<PAGE>
ITEM 2. PROPERTIES
<TABLE>
<CAPTION>
Floor Space Mortgage Lease
Facility Location Type Sq. Ft. Own/Lease Amount Expiration
<S> <C> <C> <C> <C>
Beaver Springs, PA Manufacturing 75,000 Own $ 1,009,000 -
Bela, The Czech Republic Manufacturing 40,000 Own - -
Calgary, Canada Manufacturing 5,000 Own - -
Columbus, Ohio Office, Ware & Manuf 12,000 Lease - Jan. 2002

Guadalajara, Mexico Manufacturing 63,000 Own - -
Guadalajara, Mexico Office, Ware & Manuf 40,000 Lease - May 2003
Guadalajara, Mexico Office, Ware & Manuf 40,000 Lease - April 2001
Guadalajara, Mexico Manufacturing 23,000 Lease - Oct. 2002
Guadalajara, Mexico Manufacturing 42,000 Lease - Nov. 2003
--------
Total Guadalajara 208,000

Lewisburg, PA Corporate Office 35,000 Own 2,437,000 -
Lewisburg, PA Manufacturing 100,000 Own 479,000 -
--------
Total Lewisburg 135,000

Leuchtenberg, Germany Office & Warehouse 6,000 Lease - Mar. 2004

San Jose, CA Office, Ware & Manuf 40,000 Lease - June.2002
San Jose, CA Office & Warehouse 7,000 Lease - Sept. 2000
--------
Total San Jose 47,000

Sao Paulo, Brazil Office, Ware & Manuf 15,000 Lease - Nov. 2001
Singapore Office & Warehouse 4,000 Lease - Nov. 2002
Toronto, Canada Office, Ware & Manuf 45,000 Own 648,000 -
--------
Total 592,000
</TABLE>
The Company's facilities are ISO 9002 certified with the exception of the
Germany and Czech Republic facilities which are ISO 9001 certified and the
Columbus, OH facility. Although management of the Company believes that its
facilities are currently adequate to meet its requirements, the Company may
require additional manufacturing capacity depending upon its future rate of
growth.

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any material legal proceedings nor, to the
Company's knowledge, is any material legal proceeding threatened.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not Applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
COMMON STOCK PRICE RANGE

The Company's Common Stock is listed on The NASDAQ Stock Market's National
Market ("NASDAQ") and trades under the symbol "JPMX". The following table
presents the high and low closing prices for the Common Stock for the fiscal
year ended September 30, 1999 and for the fiscal year ended September 30, 1998,
as reported by NASDAQ.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED 1998 HIGH LOW
<S> <C> <C>
First Quarter $ 27.25 $ 19.50
Second Quarter 21.73 11.19
Third Quarter 14.88 9.88
Fourth Quarter 13.75 6.50

FISCAL YEAR ENDED 1999

First Quarter $ 16.25 $ 4.75
Second Quarter 15.00 10.88
Third Quarter 13.41 9.50
Fourth Quarter 13.81 6.50
</TABLE>

On December 6, 1999 there were approximately 471 holders of record of the
Company's Common Stock and, according to latest record, approximately 3,350
beneficial holders.

DIVIDEND POLICY

The Company has never paid dividends on shares of its Common Stock. The Company
intends to retain future earnings for use in its business and does not
anticipate paying cash dividends on its Common Stock in the foreseeable future.
The payment of dividends in the future, if any, will be determined by the Board
of Directors of the Company and will depend on the Company's financial
condition, results of operations, capital requirements and such other factors as
the Board of Directors deems relevant.

ITEM 6. SELECTED FINANCIAL DATA

The following table summarizes selected consolidated financial data of the
Company for each fiscal year of the five year period ended September 30, 1999,
and should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements included elsewhere herein.
<TABLE>

FISCAL YEAR ENDED SEPTEMBER 30,

1999 1998 1997 1996 1995
----------------------------------------------------
----------------------------------------------------

Operating Statement Data:

(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE AMOUNTS)
<S> <C> <C> <C> <C> <C>

Net sales................. $166,314 $ 128,351 $ 112,787 $ 85,516 $ 54,042
Gross profit.............. 27,802 21,138 23,537 14,706 8,491
Income from operations.... 12,881 5,977 12,853 6,900 2,979
Net income................ 5,296 2,570 7,329 3,083 936
Net income as a % of sales 3.18% 2.00% 6.50% 3.60% 1.70%
Net income applicable
to Common Stock......... $ 5,296 $ 2,570 $ 7,329 $ 2,943 $ 659
Diluted net income
per common share......... $ 0.70 $ 0.35 $ 0.97 $ 0.48 $ 0.14
Weighted average common
shares outstanding (Diluted) 7,588 7,423 7,538 5,683 4,390

</TABLE>

SEPTEMBER 30,

1999 1998 1997 1996 1995
---------------------------------------------------------
---------------------------------------------------------
Balance Sheet Data:
<S> <C> <C> <C> <C> <C>

Working capital.......... $ 36,292 $ 35,392 $ 12,612 $ 10,206 $ 164
Total assets............. 124,560 89,021 54,130 39,862 25,427
Short-term debt.......... 2,744 834 9,699 2,169 6,937
Long-term debt........... 53,100 42,193 2,805 3,264 4,292
Shareholders' equity..... 38,873 30,762 28,231 19,927 4,866

</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS

OVERVIEW

The Company is a leading independent manufacturer of cable assemblies and wire
harnesses for OEMs and CMs in the telecommunications, networking, computer and
business automation sectors of the global electronics industry. The Company
manufactures a wide variety of products which transfer power or transmit voice,
data or video within the customers' equipment or to external connections.
Principal applications of the Company's products include computers, computer
peripherals, network routers and switches, self-service terminals (including
automatic teller machines), PBX switching equipment, cellular digital switching
equipment, industrial controls and medical electronic equipment. Substantially
all of the Company's business is contract manufacture of cable assemblies and
wire harnesses. By integrating its design and engineering capabilities with its
customers' product development activities, the Company customizes its products
to satisfy its customers' particular needs in a price-competitive manner.

The Company's gross margins are mainly impacted by new customer and new product
start-up costs, raw material acquisition costs, product mix and manufacturing
productivity. New customer and product start-up costs, which are typically
incurred and expensed prior to the recognition of associated revenue, include
engineering costs related to product and process development, manufacture and
approval of prototypes and training of production employees.

The following table presents, in thousands of dollars and as a percentage of net
sales, certain selected consolidated financial data for each of the three fiscal
years completed September 30, 1999, 1998 and 1997:

FISCAL YEAR ENDED
--------------------------------------------------------
(in thousands of dollars) 1999 1998 1997 1999 1998 1997
--------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

Net sales...............$166,314 $128,351 $112,787 100.0% 100.0% 100.0%
Cost of sales........... 138,512 107,213 89,250 83.3 83.5 79.1
-------------------------------------------------------
Gross profit............ 27,802 21,138 23,537 16.7 16.5 20.9
Selling, general and
administrative expenses. 14,743 13,349 9,811 8.9 10.4 8.7
Costs related to
cancelled secondary.... - 400 - - 0.3 -
Costs related to the
shut down of SC........ 178 1,412 - 0.1 1.1 -
Costs related to
merger................. - - 873 - - 0.8
-------------------------------------------------------
14,921 15,161 10,684 9.0 11.8 9.5
-------------------------------------------------------
Income from operations.. 12,881 5,977 12,853 7.7 4.6 11.4
Interest expense........ (3,912) (1,753) (670) (2.4) (1.4) (0.6)
Other income (expense).. 9 72 (1) - 0.1 -
-------------------------------------------------------
Income before taxes and
minority interest......$ 8,978 $ 4,296 $ 12,182 5.3% 3.3% 10.8%
=======================================================
</TABLE>
<PAGE>
COMPARISON OF FISCAL YEAR 1999 WITH FISCAL YEAR 1998

Net sales for fiscal 1999 increased by $37,963, or 29.6%, as compared to fiscal
1998. This increase was primarily the result of the inclusion of sales of Antrum
Interface 725, Ltd. ("Antrum")for the whole year in fiscal 1999 as compared to
the period in fiscal 1998 subsequent to its acquisition in June 1998; the
inclusion of 11 months of sales of AF Datalink Equipamentos de Telecomunicacao,
Ltda. ("Datalink"), which was acquired in November 1998; and increased sales
growth from increased volumes with existing customers. The additional sales of
the acquisitions amounted to $26,806 in fiscal 1999. However, since the Company
determines the site to manufacture products for its customers on a worldwide
basis, this increase in sales also reflects a portion of sales, and gross
margins, transferred to the acquired operations from pre-existing JPM
operations.

Gross profit increased by $6,664, or 31.5%, in fiscal 1999 as compared to fiscal
1998. Gross profit was 16.7% and 16.5% of net sales in 1999 and 1998,
respectfully.

Gross profit as a percentage of net sales in 1999 was negatively impacted by
costs associated with product realignment between the Company's manufacturing
facilities during the fiscal year and reduced revenues during the fourth
quarter. The Company maintained personnel and other costs during the fourth
quarter despite the reduced revenues, to maintain production capacity for
increased demand in the first quarter of fiscal 2000.

Selling, general and administrative ("SG&A") expenses for fiscal 1999 increased
$1,394, or 10.4%, as compared to fiscal 1998. The increase in dollars in fiscal
1999 was primarily attributable to increased goodwill amortization and personnel
costs. The decrease in SG&A as a percentage of net sales was primarily due to
greater absorption of SG&A as a result of increased sales.

SG&A expenses for fiscal 1999 include a charge of $178 for additional plant
shutdown expense related to the South Carolina manufacturing facility. The plant
shutdown expense for fiscal 1998 was $1,412. SG&A expenses in fiscal 1998 also
include $400 in expenses related to the Company's cancelled secondary offering.

Interest expense for fiscal 1999 increased $2,159, or 123.2%, as compared to
fiscal 1998. The increase is primarily attributable to borrowings for the
acquisitions of Antrum in June 1998 and Datalink in November 1998, construction
financing for new manufacturing facilities in the Czech Republic and Mexico, new
ERP system and borrowings related to increases in accounts receivable and
inventory.

The Company's effective income tax rate for fiscal 1999 was 36.1% as compared to
40.2% for fiscal 1998. The decrease in the effective tax rate was primarily
attributable to increased profits from the Company's foreign operations which
are taxed at rates lower than combined federal and state income tax rates in the
United States, partially offset by an increase in non-deductible charges for
goodwill amortization.

Net income for fiscal 1999 increased $2,726, or 106.1%, to $5,296, or $0.70 per
diluted share, as compared to net income of $2,570, or $0.35 per diluted share,
in fiscal 1998. The increase is the result of the increased revenues in fiscal
1999 and pre-tax charges of $1,812 in fiscal 1998 related to the closing of the
South Carolina manufacturing facility and cancelled secondary offering.

<PAGE>
COMPARISON OF FISCAL YEAR 1998 WITH FISCAL YEAR 1997

Net sales for fiscal 1998 increased by $15,564, or 13.8%, as compared to fiscal
1997. This increase was primarily from sales to new OEM customers, increased
sales to certain existing customers and the June 1998 acquisition of Antrum
Interface 725, Ltd . ("Antrum"). Antrum contributed $6,822 of the increase.

Gross profit decreased by $2,399, or 10.2%, in fiscal 1998 as compared to fiscal
1997. As a percentage of net sales, gross profit decreased from 20.9% to 16.5%.
The decrease in gross profit as a percentage of net sales was primarily due to
increased overhead and direct labor costs related to new customer and new
product start up, product movement costs as product was moved from one JPM
manufacturing facility to another and production inefficiencies.

Selling, general and administrative expenses for fiscal 1998 increased $3,538,
or 36.1%, as compared to fiscal 1997, primarily as a result of increased
compensation expenses for additional personnel to support the Company's growth
and expanding international presence and $400 in additional expenses related to
the Company's cancelled secondary offering. The secondary offering was cancelled
during the Company's first fiscal quarter. Fiscal 1998 also includes a second
fiscal quarter pretax charge of $1,412 for costs related to the shutdown of the
Company's manufacturing facility in Winnsboro, SC.

Interest expense for fiscal 1998 increased by $1,083, or 161.6%, as compared to
fiscal 1997. The increase was primarily due to the utilization of $16,500 for
the Company's June 1998 acquisition of Antrum, increased inventory and accounts
receivable and financing of the initial phases of building new manufacturing
facilities in the Czech Republic and Mexico.

The Company's effective income tax rate for fiscal 1998 was 40.2% as compared to
39.8% in fiscal 1997. The increase in the Company's tax rate was due to
non-deductible charges for goodwill amortization.

Net income for fiscal 1998 decreased $4,759, or 64.9%, to $2,570 as compared to
fiscal 1997 net income of $7,329. Diluted earnings per share during fiscal 1998
were $0.35 compared to $0.97 for fiscal 1997. Net income and earnings per share
decreased during the year primarily because of increased selling, general and
administrative expenses, increased interest costs and reduced gross margins as
discussed above.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities during 1999 was $6,259. Net cash used
in operating activities during 1998 was $3,914. The cash utilized in 1998 was
primarily used to finance increases in accounts receivable and finished goods
inventory, as a result of sales growth and customer requirements.

Working capital was $36,292 at September 30, 1999, an increase of $900 from
September 30, 1998. The increase in working capital was primarily the result of
increased accounts receivable and inventory in anticipation of future sales.

During 1999 and 1998, the Company expended $10,610 and $7,928, respectively for
capital expenditures, primarily for new facilities in Mexico and the Czech
Republic. Financing activities in 1999 and 1998 provided cash in the amount of
$9,790 and $29,742, respectively, primarily to finance increased working capital
needs, capital expenditures and the acquisitions of Datalink in fiscal 1999 and
Antrum in fiscal 1998.
<PAGE>

CREDIT FACILITIES

In April 1998, the Company entered into a bank revolving line of credit which
permited the Company to draw up to $60,000 secured by the assets of the
corporation. On December 17, 1998, the Company and its bank lenders modified the
line of credit agreement to provide for maximum borrowings of $70,000. This
expanded credit facility matures April 2001. The interest rate on the line is an
adjustable rate that varies between an interest rate of prime plus 0% up to
0.25%, or at the Company's election, a LIBOR rate plus 0.875% up to 2.0% tied to
the Company's ratio of total indebtedness to annualized EBITDA. The line of
credit provides for advances up to $70,000 as long as the Company is in
compliance with debt covenants for total indebtedness to total capital, total
indebtedness to annualized EBITDA and a fixed charge coverage ratio. The line of
credit provides certain restrictions with regard to acquisitions, mergers,
dissolution, disposition of assets and the incurrence of additional
indebtedness; and prohibits loans to or investments in other entities or
persons. At September 30, 1999, the Company was in compliance with all loan
covenants. At September 30, 1999, net borrowings under this line of credit
facility amounted to $47,668, against an availability of $70,000, at a weighted
average interest rate of 7.37%.

The Company believes that its cash flow from operations and credit facilities
will be sufficient to satisfy working capital requirements and capital
expenditure needs over at least the next twelve months. The Company expects to
spend approximately $7,000 on capital expenditures during fiscal 2000. However,
depending on its rate of growth, profitability and potential acquisition
activity, the Company may require additional equity or debt financing for
working capital requirements, capital expenditures, additional manufacturing
capacity or acquisitions.

RISK FACTORS

The industry segment in which the Company competes is subject to intense
competitive pressures. The following sets forth some of the risks and
uncertainties which the Company faces.

Concentration of Revenues from Major Customers

The Company's top four customers account for 64% of the Company's 1999
consolidated revenues. Loss or disruption of business with any one of these
customers could have a material adverse effect on the Company's business,
financial condition and results of operations.

Possible Fluctuations in Future Operating Results

The Company continuously seeks to expand the number of products it supplies to
existing customers, as well as to develop similar relationships with new
customers. Because of the complexity of these relationships, sales cycles can be
long, sometimes taking up to 18 months or more to develop. As the Company
becomes a qualified supplier for new products and as its customers' products
progress through their life cycles, the Company's operating results can
fluctuate significantly both annually and quarterly.

Limited Number of Suppliers

Historically, the Company has purchased a significant portion of its wire, cable
and connectors from a limited number of suppliers. Although the Company believes
that its raw materials are generally available from several domestic and
international sources, customers often specify that the Company purchase certain
components from particular manufacturers. Accordingly, the loss of any of the
Company's key suppliers could have a material adverse impact on the Company.

International Operations

Much of the Company's operations are conducted outside of the United States and
a large percentage of costs of manufacturing is transacted in local currencies.
As a result, the Company's international results of operations are subject to
local economic environments and foreign exchange rate fluctuations.

New ERP Computer Software System

On January 7, 1999, the Company announced the selection of PeopleSoft version
7.5 Global Manufacturing System(the "ERP system") to facilitate the integration
of its nine (9) worldwide manufacturing facilities as well as remote sales,
engineering, and distribution locations during an approximate 24 month rollout.
The ERP system includes Manufacturing, Distribution, Financial, and Human
Resource Management modules, including Performance Measurement functionality.
The selection of a tier one ERP system is consistent with the Company's
strategic plan to promote its global manufacturing capability, better serve its
customers, align its organization, and finally, implement an infrastructure and
tools to integrate its worldwide operations. The ERP project will be supported
by a new network infrastructure and complemented by a new global messaging and
document management system as well as computer aided design tools. The Company
intends to utilize PeopleSoft's E-business initiatives by integrating these
information systems with its customers and suppliers via extranets, the
Internet, electronic data interchange ("EDI"), and electronic funds transfer
("EFT"). The PeopleSoft ERP implementation is intended to allow the Company to
unify operations by providing consistency and standardization of the entire
company. The Company expects its cash outlay to be approximately $5,000 over the
two year period of its installation. The majority of this outlay will be
capitalized. If the Company encounters significant delays or problems in the
installation and implementation of the ERP system, this could have a material
adverse effect on the Company's financial condition and results of operations.

Year 2000 Issues

The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. Any of the
Company's computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions in operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.

The Company is aware of potential Year 2000 issues in its internal computer
systems and software, customer and supplier systems and software, Electronic
Data Interchange (EDI) software, and security and production equipment
containing micro-processors.

The Company has implemented a Year 2000 project previously headed by its
Director of Management Information Services and now being coordinated by its
Corporate Treasurer. Each JPM facility also has a Year 2000 project team. The
project team has identified areas with potential Year 2000 issues and developed,
assessed, and evaluated projects in each of those areas. A report on the status
of Year 2000 projects is issued to the Company's Chief Executive Officer and the
Chief Financial Officer on a monthly basis. This information is then summarized
and reported to the Board of Directors at its quarterly meetings.

The Company's enterprise software, consisting of its internal financial and
manufacturing systems, has been evaluated for Year 2000 compliance. Based on
this evaluation, the Company has implemented and validated enterprise system
software upgrades that are required so that its computer systems will properly
utilize dates beyond December 31, 1999. The Company presently believes with the
conversion and modifications of the software, the Year 2000 issue can be
mitigated. However, if such modifications or conversions are not adequate, the
Year 2000 issue could have a material impact on the operations of the Company.

The Company has inventoried its computer hardware and validated its Year 2000
compliance. The Company does not believe that it will require any additional
significant investment to upgrade any such hardware.

The Company generally utilizes Microsoft based office suites and networking
products for its computing software needs and upgrades to newer software as it
becomes available. The Company's current standard products are Windows 95 and
Office 97. The Company utilizes Auto-Cad for its engineering functions. These
products have been validated for Year 2000 compliance by software provided by
the suppliers. Because of its recent investment in this upgraded software, the
Company does not believe that any additional investment would be material.

The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
issues. These communications ask for written assurances that they are or will be
Year 2000 compliant. The Company utilizes some of its larger customers'
forecasts as part of its material requirements planning system. The Company has
alternate sources for substantially all of its raw materials as a contingency if
any of its suppliers are not able to supply material. The Company believes that
it cannot produce an adequate contingency plan if the customer is not able to
order its parts or supply its forecasts.

The Company has assessed and validated the Electronic Data Interchange systems
that it utilizes to communicate and transmit data between the Company and its
suppliers and customers.

The Company has inventoried those security systems, production assets and
testing and quality assurance equipment that contain microprocessors and is in
the process of validating Year 2000 compliance. The Company is not heavily
mechanized and expects that any remediation costs yet to be recognized would not
be material.

The Company's total estimated Year 2000 project costs of approximately $250,000,
of which approximately $225,000 has been incurred, include the estimated cost
and time associated with the impact of third parties' Year 2000 issues on the
Company and are based on presently available information. The Company has
provided the funds for the Year 2000 project through utilization of its
internally generated funds and its bank line of credit.

There can be no guarantee that the systems of other companies on which the
Company's systems rely will be timely converted, or that a failure to convert by
another company, or a conversion that is incompatible with the Company's
systems, would not have a material adverse effect on the Company. The Company
has determined it has no exposure to contingencies related to the Year 2000
issue for the products it manufactures or has sold.

The Company does not currently believe that it has any material exposure to the
Year 2000 issue. However, if the Company discovers any such exposure, it will
implement projects to correct or prepare contingency plans to address any such
issue. The Company believes that a material failure would occur if a utility
supplier were unable to provide service to one or more of the Company's
facilities. The Company does not currently have an alternative for this
contingency.

The costs of the project and the dates on which the Company plans to complete
the Year 2000 assessments, modifications, conversions and validation are based
on management's best judgement. The projected costs were derived utilizing
assumptions of future events including the continued availability of certain
resources, third party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved and actual results could
differ materially from these plans. Specific factors that might cause such
material differences include, but are not limited to, the availability and cost
of personnel trained in this area, the ability to locate and correct relevant
computer codes and similar uncertainties.

Market Risk Discussion

The Company's financial results are affected by foreign currency exchange rate
fluctuations. The Company operates manufacturing facilities in four foreign
countries and has a number of non-owned foreign manufacturing relationships. The
Company's sales and raw material purchases are generally denominated in U.S.
dollars, or are related to the U.S. dollar through formula pricing. Since
certain foreign manufacturing costs, principally labor, are in foreign
currencies, a strengthening U.S. dollar causes the Company's foreign currency
denominated costs to decrease while a weakening U.S. dollar has an unfavorable
effect on costs.

This foreign exchange effect cannot be precisely isolated since many other
factors affect the Company's overall sales and earnings. These factors include
product offerings and pricing policies of the Company and its competition,
whether the competition is foreign or U.S. based, changes in technology and
local and worldwide economic conditions.

The Company has not historically engaged in foreign currency hedging activities.
However, as the Company continues to grow, it expects to utilize hedging
techniques, including the use of foreign currency forward contracts and options,
designed to mitigate the effect of foreign currency fluctuations on its
international operations and net investments. The Company does not speculate in
foreign currencies or derivative financial instruments and designed hedging
techniques do not increase the Company's exposure to foreign exchange rate
fluctuations.

The Company is exposed to changes in interest rates primarily due to its
borrowing and investing activities which include primarily short and long-term
debt used to maintain liquidity and fund its business operations. The Company
has two interest rate swap agreements with commercial banks to effectively fix
its interest rates on $22,500 of variable rate debt. The first agreement
effectively fixes the interest rate on a notional $15,000 of variable LIBOR rate
debt at 7.79%, and expires April 9, 2001 unless terminated by the counterparty
on June 1, 2000. The second agreement effectively fixes the interest rate on a
notional $7,500 of variable LIBOR rate debt at 7.65%, and expires August 20,
2004. The interest differentials to be paid or received on the notional amounts
of the swaps are recognized over the lives of the agreements. At September 30,
1999 interest rate levels, the swaps require the Company to make payments to the
bank. The approximate termination value of the swaps would be a benefit to the
Company of $227.
<PAGE>
Recent Accounting Pronouncements

On June 15, 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. SFAS 133 requires
that all derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are recorded each period in
current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction, and if it is, the type
of hedge transaction. Management of the Company anticipates that due to its
limited use of derivative instruments, the adoption of SFAS 133 will not have a
significant effect on the Company's results of operations or its financial
position.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and notes thereto listed in the accompanying index to
financial statements (Item 14) are filed as part of this Annual Report and
incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The response to this item is contained in the Company's 2000 Proxy Statement
under the caption "Election of Directors" and is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

The response to this item is contained in the Company's 2000 Proxy Statement
under the caption "Compensation of Executive Officers and Directors" and is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The response to this item is contained in the Company's 2000 Proxy Statement
under the caption "Beneficial Ownership of Capital Stock" and is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The response to this item is contained in the Company's 2000 Proxy Statement
under the caption "Certain Relationships and Related Party Transactions" and is
incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

-Report of Independent Accountants

-Consolidated Balance Sheet as of September 30, 1999 and 1998.

-Consolidated Statement of Operations for the years ended
September 30, 1999, 1998 and 1997.

-Consolidated Statement of Shareholders' Equity for the years
ended September 30, 1999, 1998 and 1997.

-Consolidated Statement of Cash Flows for the years ended
September 30, 1999, 1998 and 1997.

-Notes to Consolidated Financial Statements
<PAGE>
2. Financial Statement Schedules

-Schedule II-Valuation and Qualifying Accounts.

Schedules other than those listed above have been omitted
since the required information is not present or not present
in amounts sufficient to require submission of the schedule,
or because the information required is included in the
consolidated financial statements or the notes thereto.

3. Exhibits Required to be Filed by Item 601 of Regulation S-K.

The exhibits listed in the Exhibit Index immediately
preceding such exhibits are filed as part of this Annual
Report on Form 10-K unless incorporated by reference as
indicated.

(b) Reports on Form 8-K:

None

<PAGE>

SIGNATURES

Pursuant to 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, thereunto duly authorized.

THE JPM COMPANY
(Registrant)

BY: /s/ William D. Baker BY: /s/ John H. Mathias
----------------------------- --------------------------
William D. Baker John H. Mathias
Vice President and Chairman of the Board and
Chief Financial Officer Chief Executive Officer
(Principal Financial Officer) (Principal Executive Officer)

Date December 27, 1999 December 27, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- ----
/s/ John H. Mathias Chairman, Chief Executive Officer December 27, 1999
- ------------------------------- and Director (Principal Executive
John H. Mathias Officer)

/s/ James P. Mathias President, Chief Operating Officer December 27, 1999
- ------------------------------- and Director
James P. Mathias

/s/ William D. Baker Vice President, Chief Financial Officer December 27, 1999
- ------------------------------- (Principal Financial and
William D. Baker Accounting Officer)

/s/ Wayne A. Bromfield Executive Vice President, General
- ------------------------------- Counsel, Secretary and Director December 27, 1999
Wayne A. Bromfield

/s/ Janet B. Mathias Director December 27, 1999
- -------------------------------
Janet B. Mathias

/s/ Clifford M. Melberger Director December 27, 1999
- -------------------------------
Clifford M. Melberger

/s/ Bruce M. Eckert Director December 27, 1999
- -------------------------------
Bruce M. Eckert

/s/ William Rulon-Miller Director December 27, 1999
- -------------------------------
William Rulon-Miller
</TABLE>
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of The JPM Company

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14 (a) (1) on page 16 present fairly, in all material
respects, the financial position of The JPM Company and its subsidiaries (the
"Company") at September 30, 1999 and 1998, and the results of their operations
and their cash flows for each of the three years in the period ended September
30, 1999, in conformity with generally accepted accounting principles. In
addition, in our opinion, the financial statement schedule listed in the index
appearing under Item 14 (a) (2) on page 17 presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedule are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP

Philadelphia, PA
November 8, 1999
<PAGE>

THE JPM COMPANY
CONSOLIDATED BALANCE SHEET
(in thousands except per share amounts)

SEPTEMBER 30,
----------------------------
1999 1998
<S> <C> <C>
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 969 $ 2,625
Accounts receivable (net of allowance of $358 and $326)........ 21,755 19,681
Inventories,net................................................ 37,227 23,984
Other current assets........................................... 5,802 3,711
------ ------
Total current assets......................................... 65,753 50,001
Property, plant and equipment, net............................... 31,164 21,267
Excess of cost over fair value of net assets
acquired and other intangible assets, net....................... 24,773 15,445
Other assets..................................................... 2,870 2,308
------ ------
$124,560 $ 89,021
======== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings.......................................... $ - $ 290
Current maturities of long-term debt........................... 744 544
Notes payable.................................................. 2,000 -
Accounts payable............................................... 18,375 7,707
Accrued expenses............................................... 4,753 4,448
Deferred income taxes.......................................... 3,589 1,620
------ ------
Total current liabilities.................................... 29,461 14,609
Long-term debt................................................... 53,100 42,193
Deferred compensation liability.................................. 1,405 961
Deferred income taxes............................................ 1,023 496
Minority interest................................................ 698 -
------ ------
85,687 58,259
------ ------
Commitments and contingencies.................................... - -
Shareholders' equity:
Preferred Stock, no par value, 10,000 shares
authorized, Class A, $31.43 stated value, no shares issued
and outstanding............................................. - -
Common Stock, $.000067 par value, 40,000
shares authorized, 7,364 shares issued in 1999 and 7,060
shares issued in 1998....................................... - -
Additional paid-in capital..................................... 20,373 17,513
Retained earnings.............................................. 18,910 13,614
Accumulated other comprehensive loss........................... (410) (365)
------- -------
Total shareholders'equity.................................... 38,873 30,762
====== ======
$124,560 $ 89,021
======== ========

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

</TABLE>

THE JPM COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share amounts)

YEAR ENDED
SEPTEMBER 30,
-----------------------------------
1999 1998 1997
<S> <C> <C> <C>

Net sales.......................... $ 166,314 $ 128,351 $ 112,787
Cost of sales...................... 138,512 107,213 89,250
---------- --------- --------
27,802 21,138 23,537
Selling, general and administrative
expenses........................... 14,743 13,349 9,811
Secondary offering costs............ - 400 -
Plant shutdown costs................ 178 1,412 -
Costs related to merger............. - - 873
---------- --------- --------
12,881 5,977 12,853
Other income (expense):
Interest expense................... (3,912) (1,753) (670)
Other, net......................... 9 72 (1)
---------- --------- --------
(3,903) (1,681) (671)
---------- --------- --------
Income before income taxes and
minority interest.................. 8,978 4,296 12,182
Provision for income taxes.......... 3,245 1,726 4,853
---------- --------- --------
Income before minority interest..... 5,733 2,570 7,329
Minority interest................... 437 - -
---------- ---------- --------
Net income.......................... $ 5,296 $ 2,570 $ 7,329
========== ========== ========
Basic earnings per common share..... $ 0.72 $ 0.37 $ 1.07
========== ========== ========
Diluted earnings per common share... $ 0.70 $ 0.35 $ 0.97
========== ========== ========
Weighted average number of shares of
Common Stock outstanding (basic)... 7,314 7,022 6,875
========== ========== ========
Weighted average number of shares of
Common Stock outstanding (diluted). 7,588 7,423 7,538
========== ========== ========

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>

THE JPM COMPANY
CONSOLIDATED STATEMENTS OF
SHAREHOLDERS' EQUITY

Common Stock Accumulated
----------------- Additional Other Total
Number of Par Paid-in Retained Comprehensive Shareholders'
Shares Value Capital Earnings Loss Equity
<S> <C> <C> <C> <C> <C> <C>

Balance at September 30, 1996 6,808,849 $ - $16,212 $ 3,715 $ - $19,927
Issuance of common stock 161,396 - 975 - - 975
Net income - - - 7,329 - 7,329
----------------------------------------------------------------------------
Balance at September 30, 1997 6,970,245 - 17,187 11,044 - 28,231
Issuance of common stock 89,553 - 326 - - 326
Comprehensive loss - - - - (365) (365)
Net income - - - 2,570 - 2,570
----------------------------------------------------------------------------
Balance at September 30, 1998 7,059,798 - 17,513 13,614 (365) 30,762
Issuance of common stock 304,522 - 2,860 - - 2,860
Comprehensive loss - - - - (45) (45)
Net income - - - 5,296 - 5,296
----------------------------------------------------------------------------
Balance at September 30, 1999 7,364,320 $ - $20,373 $18,910 $(410) $38,873
============================================================================

</TABLE>

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

THE JPM COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)

YEAR ENDED SEPTEMBER 30,
-----------------------------------
1999 1998 1997
<S> <C> <C> <C>
-------- -------- ---------
Cash flows from operating activities:
Net income ....................................................................... $ 5,296 $ 2,570 $ 7,329
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization .................................................. 3,948 2,727 1,640
Foreign currency translation (gain) loss ....................................... (17) (52) (12)
Loss (gain) on sale of property, plant and equipment ........................... (18) - 66
Deferred taxes ................................................................. 1,869 33 61
Minority interest .............................................................. 437 - -
Deferred compensation expense .................................................. 444 340 112
Secondary offering costs........................................................ - 400 -
Plant shutdown costs ($1,412 less cash payments of $742)........................ - 670 -
Change in assets and liabilities, net of effects from businesses acquired:
(Increase) decrease in accounts receivable ................................... (1,413) (5,057) (438)
(Increase) decrease in inventories ........................................... (12,503) (2,097) (7,762)
(Increase) decrease in other assets .......................................... (1,940) (2,887) (1,086)
Increase (decrease) in accounts payable ...................................... 10,694 (178) (773)
Increase (decrease) in accrued expenses ...................................... (538) (8) 175
Increase (decrease) in income taxes payable .................................. - (375) (513)
-------- -------- --------
Net cash provided by (used in) operating activities ............................ 6,259 (3,914) (1,201)
-------- -------- --------
Cash flows from investing activities:
Payments for assets and businesses acquired, net of cash acquired of $465 in 1999,
$1,233 in fiscal 1998 and $88 in fiscal 1997 ................................... (5,914) (15,415) (1,897)
Capital expenditures ............................................................. (10,610) (7,928) (4,255)
Proceeds from sale of property, plant and equipment .............................. 28 - 7
Collections of notes receivable -- related parties ............................... - - 206
Deferred compensation plan contributions ......................................... (444) (403) (116)
-------- -------- --------
Net cash provided by (used in) investing activities ............................ (16,940) (23,746) (6,055)
-------- -------- --------
Cash flows from financing activities:
Net borrowings (repayments) under credit facilities .............................. 9,878 29,608 6,650
Proceeds from issuance of long-term debt ......................................... - 2,600 40
Principal payments on long-term debt ............................................. (678) (2,697) (699)
Common stock issuance ............................................................ 246 231 397
Subsidiary equity transaction..................................................... 344 - -
-------- -------- --------
Net cash provided by (used in) financing activities ............................ 9,790 29,742 6,388
-------- -------- --------
Effect of changes in exchange rates on cash ........................................ (765) - -
-------- -------- --------
Increase (decrease) in cash and cash equivalents ................................... (1,656) 2,082 (868)
Cash and cash equivalents at beginning of period ................................... 2,625 543 1,411
-------- -------- --------
Cash and cash equivalents at end of period ......................................... $ 969 $ 2,625 $ 543
======== ======== ========
Supplemental information relative to cash paid for interest -- See Note 8.
Supplemental information relative to cash paid for income taxes -- See Note 10.

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

</TABLE>
<PAGE>
THE JPM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands except per share data)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The JPM Company (the "Company") is an independent manufacturer of cable
assemblies and wire harnesses for original equipment manufacturers in the
telecommunications, networking, computer and business automation sectors of the
global electronics industry.

A substantial portion of the Company's products are sold to a limited number of
customers. Accordingly, a significant decrease in business from, or the loss of,
any major customer would have a material adverse effect on the Company. The
Company continuously seeks to expand the number of products it supplies to
existing customers, as well as to develop similar relationships with new
customers. Because of the complexity of these relationships, sales cycles can be
long, sometimes taking up to 18 months or more to develop. As the Company
becomes a qualified supplier for new products and as its customers' products
progress through their life cycles, the Company's operating results can
fluctuate significantly both annually and quarterly.

A summary of the Company's significant accounting policies follows:

Basis of presentation

On June 4, 1997 the Company completed a merger with Denron, Inc. ("Denron") by
exchanging 791,170 shares of the Company's common stock for all of the
outstanding common stock of Denron. The merger was accounted for as a pooling of
interests in accordance with Accounting Principles Board Opinion No. 16,
"Business Combinations" ("APB 16"). Accordingly, all prior period consolidated
financial statements presented were restated to include the combined results of
operations, financial position and cash flows of Denron as though it had always
been a part of the Company.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned and majority-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.

Cash and cash equivalents

Cash and cash equivalents represent cash and highly liquid short-term
investments with original maturities of three months or less.

Inventories

Inventories are valued at the lower of cost or market as determined on the
first-in, first-out basis. Cost includes raw materials, direct labor and
manufacturing overhead. The Company generally provides reserves for inventory
considered to be in excess of 12 months of forecasted future demand.

Property, plant and equipment

Property, plant and equipment are recorded at cost and are depreciated on a
straight-line basis over the estimated useful lives of the respective assets.

Revenue recognition policy

Sales are recorded upon shipment of product. Provision is made for returns and
allowances, and for estimated warranty costs, in the period of sale.

Long-lived and intangible assets

Assets and liabilities acquired in connection with business combinations
accounted for under the purchase method are recorded at their respective fair
values. Deferred taxes have been recorded to the extent of differences between
the fair value and the tax basis of the assets acquired and liabilities assumed.
The excess of the purchase price over the fair value of the net assets acquired
is amortized on a straight-line basis over 20 years. Intangible assets include
the ISO 9002 certification of an acquired plant, which is being amortized on a
straight-line basis over five years.
<PAGE>
The carrying value of long-lived assets and certain identifiable intangible
assets will be evaluated whenever changes in circumstances indicate the carrying
amount of such assets may not be recoverable. In performing such review for
recoverability, the Company will compare the expected future cash flows to the
carrying value of long-lived assets and identifiable intangibles. In addition,
on a quarterly basis, the carrying value of the excess of cost over fair value
of net assets acquired is subject to a separate evaluation.

Foreign currency translation

The Company has determined that the U.S. dollar is the functional currency of
its Mexican operations. Foreign currency inventories and property, plant and
equipment are remeasured into U.S. dollars at historical rates; all other
foreign currency assets and liabilities are remeasured at year-end exchange
rates. Income and expenses are remeasured at average rates prevailing during the
year, except for expenses related to inventories and property, plant and
equipment, which are remeasured at historical rates. Exchange gains and losses
resulting from remeasurement are included in earnings and amounted to gains of
$17, $52, and $12 for fiscal 1999, 1998 and 1997, respectively.

For all other foreign subsidiaries the Company has determined the local currency
is the functional currency. Therefore, assets and liabilities are translated
into U.S. dollars at year-end exchange rates. Income and expense items are
translated at average rates prevailing during the year. Translation adjustments
for these subsidiaries are accumulated in a separate component of shareholders'
equity.

Earnings per common share

The difference between the basic average number of shares outstanding and the
diluted average number of shares outstanding is due to the treasury stock method
calculation of the impact of unexercised stock options granted under the
Company's stock option plans.

Stock based compensation

Statement of Financial Accounting Standards No. 123,"Accounting for Stock Based
Compensation" ("SFAS 123") defines a fair value based method of accounting for
employee stock options or other similar equity instruments. Companies must
either adopt the fair value method or disclose the pro forma income statement
effects in their financial statements. The Company has elected to disclose the
pro forma income statement effects of SFAS 123; therefore, SFAS 123 does not
affect the Company's financial position or results of operations.

Recent accounting pronouncements

On June 15, 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000 (October 1, 2000 for
the Company). SFAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value. Changes in the fair value of derivatives
are recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction,
and if it is, the type of hedge transaction. Management of the Company
anticipates that due to its limited use of derivative instruments, the adoption
of SFAS 133 will not have a significant effect on the Company's results of
operations or its financial position.

Reclassifications

Certain prior year balances have been reclassified for comparative purposes.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

<PAGE>

2. ACQUISITIONS

In November 1998, the Company acquired 60% of the stock of AF Datalink
Equipamentos de Telecomunicacao, Ltda. ("Datalink"), a Sao Paulo, Brazil based
manufacturer of wire harnesses and cable assemblies for $6,000 in cash, $2,500
in stock (256,000 shares of JPM stock)and one-year notes for $2,000 with
interest at 8.75%. The transaction has been accounted for as a purchase in
accordance with APB 16.

In June 1998, the Company acquired all of the stock of Antrum Interface 725,
Ltd. ("Antrum"), manufacturers and assemblers of cable and wire harnesses, for
cash consideration of approximately $16,500. This consideration does not include
contingent cash consideration of up to $4,500 which may be paid pursuant to an
earn out arrangement included in the stock purchase agreement. This arrangement
provides for the Company to pay additional consideration based on operating
profit targets, as defined, for the period from June 1, 1997 through November
30, 2000. Such contingent consideration, if earned, will be treated as
additional purchase price when earned. The transaction has been accounted for as
a purchase in accordance with APB 16.

The unaudited results of operations on a pro forma basis as if Datalink and
Antrum had been acquired as of the beginning of the respective periods below are
as follows:

Year Ended September 30,
------------------------
1999 1998
------------------------
<S> <C> <C>
Net sales $166,917 $149,582
Operating income 13,203 14,871
Net income 5,417 3,200
Net income per diluted common share $ 0.69 $ 0.42

</TABLE>

In August 1997, the Company acquired the assets of Corma Elektrotechnische
Productions GmbH, Leuchtenberg, Germany and Corma spol s.r.o., Bor, the Czech
Republic (collectively "Corma"), manufacturers and assemblers of cable and wire
harnesses, for cash consideration of $1,688.

Information with respect to these acquisitions is presented below:

1999 1998 1997
---- ---- ----
Cash paid (net of cash acquired) .............. $ 5,535 $15,267 $ 1,688
Issuance of common stock and notes payable..... 4,500 - -
Transaction and other costs ................... 379 148 209
------- ------- -------
10,414 15,415 1,897
Fair value of tangible assets acquired ........ 275 (4,262) (1,435)
------- ------- -------
Excess of cost over fair value of net assets
acquired and other intangible assets ........ $10,689 $11,153 $ 462
======= ======= =======

Excess of cost over fair value of net assets acquired and other intangible
assets comprise the following:

SEPTEMBER 30,
-------------
1999 1998
------- -------
Excess of cost over fair value of net assets acquired .... $ 27,072 $16,383
Other .................................................... 250 250
------- -------
27,322 16,633
Accumulated amortization ................................. (2,549) (1,188)
------- -------
$ 24,773 $15,445
======= =======

<PAGE>
3. CLOSING OF SOUTH CAROLINA MANUFACTURING FACILITY

On March 27, 1998, the Company announced plans to cease operations at its
Winnsboro, S.C. manufacturing location and subsequently transfer all business to
other plants in Pennsylvania, California and Mexico.

The plant ceased production on June 26, 1998. Supervisory and breakdown crews
remained at the facility until July 17, 1998. The Company accrued expenses
totaling $1,412 and $178 in 1998 and 1999, respectively, for closing and
severance costs. These costs are reflected in the income statement as a separate
line item described as "Plant shutdown costs." All activity has ceased and the
Company is seeking a buyer for the physical facility.

4. MAJOR CUSTOMERS AND SUPPLIERS

Net sales to Nortel, IBM, Hewlett-Packard and Lucent amounted to 28%, 14%, 11%
and 11% of total sales, respectively, for fiscal 1999. Net sales to Nortel, IBM,
Hewlett-Packard and Diebold amounted to 21%, 16%, 13% and 11% of total sales,
respectively, for fiscal 1998. Net sales to Diebold, Nortel, IBM and
Hewlett-Packard amounted to 17%, 16%, 14% and 10% of total net sales,
respectively, for fiscal 1997. Aggregate net sales to major customers, each of
which exceeded 10% of total net sales were 64%, 61%, and 57% of total net sales
in 1999, 1998 and 1997, respectively. At September 30, 1999 and 1998, aggregate
accounts receivable from these customers represented 63% and 55% of total
accounts receivable, respectively. To reduce its credit risk, the Company
reviews its customers' financial position before extending credit and
periodically thereafter.

5. INVENTORIES

SEPTEMBER 30,
-------------
1999 1998
-------- ---------
Finished goods ............................. $ 10,392 $ 5,915
Work-in-process ............................ 5,134 4,194
Raw materials and supplies ................. 23,039 15,172
Valuation reserve .......................... (1,338) (1,297)
-------- --------
$ 37,227 $ 23,984
======== ========

6. PROPERTY, PLANT AND EQUIPMENT, NET

SEPTEMBER 30,
------------------- ESTIMATED
1999 1998 USEFUL LIVES
------ ------ ------------
Land ............................... $ 400 $ 645
Buildings and improvements ......... 13,511 9,627 10-25 years
Machinery and equipment ............ 13,867 11,593 5-10 years
Furniture and fixtures ............. 7,953 6,819 5-10 years
Vehicles ........................... 451 377 3- 5 years
Construction in progress ........... 6,371 2,838
-------- --------
42,553 31,899
Less: Accumulated depreciation ..... (11,389) (10,632)
--------- --------
$ 31,164 $ 21,267
======== ========

<PAGE>

The Company leases certain equipment under capital leases. Property, plant and
equipment includes $1,898 and $298 of capital leases at September 30, 1999 and
1998. Accumulated depreciation includes $152 and $24 at September 30, 1999 and
1998 respectively, related to these capital leases. The following is a schedule
by years of future minimum lease payments under capital leases together with the
present value of net minimum lease payments:

Year ending September 30:

2000 $ 430
2001 430
2002 392
2003 364
2004 182
------
Total net minimum lease payments 1,798
Less amount representing interest (195)
------
Present value of net minimum lease payments $1,603
======

At September 30, 1998, buildings and improvements included $1,080 and
accumulated depreciation included $96 for capital leases that were refinanced
with mortgages during fiscal 1999.

The Company also leases certain office and manufacturing facilities, office
equipment and vehicles under operating leases. Rent expense under operating
leases was $1,054, $1,116 and $662 for fiscal 1999, 1998 and 1997 respectively.
Future minimum lease payments under operating leases are:

2000 $ 821
2001 530
2002 336
2003 166
2004 9
-----
Total minimum payments required $1,862
=====

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
SEPTEMBER 30,
-----------------
1999 1998
------ ------
Salaries and benefits ........................ $3,523 $2,593
Other ........................................ 1,230 1,855
------ ------
Total accrued expenses ....................... $4,753 $4,448
====== ======

Included in accounts payable at September 30, 1999 and 1998 are book
overdrafts totaling $2,906 and $827, respectively.

<PAGE>

8. FINANCING ARRANGEMENTS
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
<S> <C> <C>
1999 1998
------- ------
Mortgage payable to Pennsylvania Industrial Development Authority; at a fixed rate
of 5.75%; payable in monthly installments of $4 through May 2014; secured by land,
buildings and improvements in Beaver Springs, PA with a net book value of $1,714 at
September 30, 1999...................................................................$ 472 -

Mortgage payable to bank; at a fixed rate of 8.25%; payable in monthly
installments of $19 through September 2010; secured by land, buildings and
improvements in Lewisburg, PA with a net book value of $909 at
September 30, 1999 .................................................................. 479 679

Mortgage payable to bank; at a fixed rate of 7.75%; payable in monthly installments of
$6 through December 2011; secured by land, buildings and improvements in Beaver Springs,
PA with a net book value of $1,714 at September 30, 1999............................. 537 -

Mortgage payable to bank; at a fixed rate of 7.25%; payable in monthly installments of
$24 through January 2013; secured by land, building and improvements in Lewisburg, PA
with a net book value of $3,410 at September 30, 1999................................ 2,437 2,547

Mortgage payable to bank; bank prime rate plus .75% (6.25% at September 30, 1999 and an
average rate of 6.53% for fiscal 1999); payable in monthly installments of $4 through
December 2002; secured by land and building in Pickering, Ontario, Canada with a
net book value of $1,133 at September 30, 1999....................................... 648 678

Debt under a line of credit facility; $49,500 at a weighted average LIBOR-based rate
of 7.37% at September 30, 1999 less short-term invested funds of $1,832 at
September 30, 1999.................................................................. 47,668 37,500

Capital lease obligations, payable through 2003 ...................................... 1,603 1,307

Other term loans payable ............................................................. - 26
------- -------
53,844 42,737
Less: Current maturities ............................................................. (744) (544)
------- -------
$ 53,100 $42,193
======== =======
</TABLE>

Maturities of long-term debt, subsequent to September 30, 1999 are as follows:

<TABLE>
<CAPTION>
Year ending
September 30,
<S> <C>
2000 ............................ $ 744
2001 ............................ 48,472
2002 ............................ 665
2003 ............................ 1,041
2004 ............................ 388
Thereafter ...................... 2,534
------
$ 53,844
======
</TABLE>

Interest paid in fiscal 1999, 1998 and 1997 on short-term borrowings and
long-term debt totaled $4,003, $1,440, and $615, respectively.

The Company has a $70,000 bank revolving line of credit that expires in April
2001 and provides for both short and long-term borrowing. The interest rate on
the line is an adjustable rate which varies between the bank's prime lending
rate plus 0% up to 0.25% or, at the Company's election, a LIBOR-based rate plus
0.875% up to 2.0% measured on a sliding scale tied to the Company's debt to
annualized EBITDA ratio. Borrowings are secured by substantially all of the
Company's assets. The line of credit requires maintenance of certain financial
ratios and provides certain restrictions with regard to acquisitions, mergers,
dissolution, disposition of assets and the incurrence of additional
indebtedness; and prohibits loans to or investments in other entities or
persons. At September 30, 1999, the Company was in compliance with all loan
covenants.

Short-term borrowings of $290, at an interest rate of 8.25%, were outstanding at
the end of fiscal 1998.

The Company has two interest rate swap agreements with commerical banks to
effectively fix its interest rates on $22,500 of variable rate debt. The first
agreement effectively fixes the interest rate on a notional $15,000 of variable
LIBOR rate debt at 7.79%, and expires April 9, 2001 unless terminated by the
counterparty on June 1, 2000. The second agreement effectively fixes the
interest rate on a notional $7,500 of variable LIBOR rate debt at 7.65%, and
expires August 20, 2004. The interest differentials to be paid or received on
the notional amounts of the swaps are recognized over the lives of the
agreements. At September 30, 1999 interest rate levels, the swaps require the
Company to make payments to the bank. The approximate termination value of the
swaps would be a benefit to the Company of $227.

9. COMPREHENSIVE INCOME

The Company adopted SFAS No. 130, "Reporting Comprehensive Income," as of the
first quarter of fiscal 1999. SFAS No. 130 establishes new rules for the
reporting and display of comprehensive income and its components, however, it
had no impact on the Company's net income or total shareholders' equity.

The components of comprehensive income are as follows:
<TABLE>
<CAPTION>
Year Ended September 30,
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Net income........................ $5,296 $2,570 $7,329

Other comprehensive income (loss):
Change in accumulated
translation adjustment......... (45) (365) -
------ ------ ------
Total comprehensive income........ $5,251 $2,205 $7,329
====== ====== ======
</TABLE>

10. INCOME TAXES

Provision for income taxes in the consolidated statement of operations:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------
1999 1998 1997
-------- -------- ---------
<S> <C> <C> <C>
Current expense (benefit)
Federal ............................. $ (955) $ (592) $ 3,561
State ............................... (835) (116) 510
Foreign ............................. 3,166 2,401 721
------- ------- -------
1,376 1,693 4,792
------- ------- -------
Deferred expense (benefit)
Federal ............................. (179) 146 (436)
State ............................... ( 57) 26 (49)
Foreign ............................. 2,105 (139) 546
------- ------- -------
1,869 33 61
------- ------- -------
$ 3,245 $ 1,726 $ 4,853
======= ======= =======
</TABLE>
<PAGE>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at September 30, 1999
and 1998 are presented below:

<TABLE>
<CAPTION>
September 30,
-------------------
1999 1998
------- -------
<S> <C> <C>
Deferred tax assets:
Accounts receivable .................................... $ 87 $ 85
Inventory .............................................. 757 638
Property, plant and equipment .......................... 49 12
Accrued employee liabilities ........................... 1,184 849
Other .................................................. 3 30
------- -------
2,080 1,614
------- -------
Deferred tax liabilities:
Inventory .............................................. (3,673) (1,671)
Property, plant and equipment .......................... (1,015) (864)
------- -------
(4,688) (2,535)
------- -------
Net deferred tax liability ............................. $(2,608) $ (921)
======= =======
</TABLE>

An analysis of the Company's effective income tax rate is as follows:
<TABLE>
<CAPTION>
Year Ended September 30,
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Income taxes at U.S. federal income tax rate ............ $ 3,053 $ 1,461 $ 4,142
State taxes, net of federal benefit ..................... (589) (71) 320
Foreign operations taxed at higher rates................. 160 85 -
Amortization of intangible assets ....................... 444 177 81
Inflation ............................................... 139 59 48
Other, net .............................................. 38 15 262
------- ------- -------
Provision for income taxes .............................. $ 3,245 $ 1,726 $ 4,853
======= ======= =======
Effective income tax rate ............................... 36.1% 40.2% 39.8%
======= ======= =======
</TABLE>
Cash paid for income taxes totaled $4,203, $3,504, and $5,610 in fiscal 1999,
1998 and 1997, respectively.

Pre-tax earnings of foreign subsidiaries were $15,287, $5,895 and $4,051 in
fiscal 1999, 1998 and 1997, respectively. Unremitted earnings of such foreign
subsidiaries of $17,692 were deemed to be permanently invested at September 30,
1999. No deferred tax liability has been recorded related to future remittance
of these earnings. It is not practicable to estimate the income tax liability
that might be incurred upon remittance of such earnings to the United States.

11. EMPLOYEE BENEFIT PLANS

The Company maintains a tax-qualified defined contribution employee profit
sharing plan (the "Profit Sharing Plan"). All full-time U.S. employees, except
for employees of Denron in 1997, who are 21 years of age or older and who have
completed one year of service with the Company are eligible to participate. The
Company may make discretionary profit sharing contributions to the Profit
Sharing Plan for any plan year. A participant is entitled to receive a
distribution of the vested interest in his or her account upon retirement,
death, permanent disability or termination of employment. The Company's
contribution vests to the employee ratably over a seven-year period. The Company
contributed $177, $193, and $150 for fiscal 1999, 1998 and 1997, respectively.
<PAGE>

The Profit Sharing Plan also contains provisions that are intended to satisfy
the tax qualification requirements of Section 401(k) of the Internal Revenue
Code (the "401(k) Plan"). All full-time U.S. employees, except for employees of
Denron in 1997, who are 21 years of age or older and who have completed 90 days
of service with the Company are eligible to participate in the 401(k) Plan.
Under the 401(k) Plan, an employee may elect to defer up to 15% of his or her
current compensation. Employee contributions to the 401(k) Plan are invested
according to the direction of the employee. The Company makes matching
contributions of fifteen cents for each dollar deferred by the employee up to 6%
of an employee's total compensation. A participant is entitled to receive a
distribution of the vested interest in his or her account upon retirement,
death, permanent disability or termination of employment. The Company's matching
contribution vests immediately. Employee contributions are fully vested and
non-forfeitable at all times. The Company contributed $89, $69, and $30 for
fiscal 1999, 1998 and 1997, respectively.

The Company maintains a deferred compensation plan for certain management and
highly compensated employees. Under the provisions of the plan, each participant
may defer up to 25% of annual compensation, and the Company will contribute up
to 2.5% of each participant's annual salary on a quarterly basis (10% annually).
Deferred compensation, under the plan, is invested by the Company, at the
discretion of the Board; however, each participant's account is allocated the
actual income, gains and losses that would have been earned if their deferred
compensation had been invested in accordance with their personal investment
selections.

The Company has also entered into additional deferred compensation agreements
with two members of management. The terms of each of these agreements provide
that either employee may elect to defer any portion of their annual gross
salary. These agreements in no way obligate either participant to make such an
election in any fiscal year, and a failure to elect for any fiscal year will not
affect the right to do so in any subsequent fiscal year. These agreements do not
provide for Company contributions.

At September 30, 1999 and 1998, the Company had assets related to deferred
compensation of $1,405 and $961, respectively, which balances are included in
other assets in the accompanying consolidated balance sheet. Compensation
expense for deferred compensation arrangements aggregated $165, $161, and $112
in fiscal 1999, 1998, and 1997, respectively.

In accordance with statutory requirements in Mexico, the Company is required to
make annual profit sharing distributions to the employees of Pantera. These
distributions are determined based on 10% of Pantera's taxable income. A
provision of $60, $503, and $215 was recorded as of September 30, 1999, 1998,
and 1997, respectively, for anticipated profit sharing distributions.

12. STOCK OPTION PLANS

In April 1993, the Board of Directors approved adoption of the Stock Option
Plan of 1993 that authorized incentive stock options and non-qualified stock
options of 300,000 shares. Under the Plan, any salaried or supervisory employees
of the Company, as selected by the Board, are eligible to be granted options.
The options have ten-year terms with exercise prices equal to the fair market
value of the Company's Common Stock at the date of grant, as determined by the
Board. The options are exercisable from the date of grant. At September 30,
1995, all such options had been granted and were exercisable.

The Company's 1995 Stock Option Plan (the "1995 Plan") was approved by the
Board of Directors on August 1, 1995 and by the shareholders of the Company on
November 21, 1995. Under the 1995 Plan, options may be granted to employees and
consultants for the purchase of up to an aggregate of 475,000 shares of Common
Stock. The 1995 Plan was amended at the January 28, 1997 Shareholders' Meeting
to provide for the authorization to issue an additional 525,000 shares under the
plan. The 1995 Plan provides for grants of both incentive stock options and
non-qualified stock options. The 1995 Plan is administered by the Board which
determines, at its discretion, the number of shares subject to each option
granted and the related purchase price and vesting period.

Under the 1995 Plan, no incentive stock option may be granted to an
employee who owns more than 10% of the total combined voting power of all
classes of outstanding stock. Each option expires on the date specified by the
Compensation Committee, but not more than 10 years from its date of grant. All
incentive options granted under the 1995 Plan will have an exercise price of not
less than 100% of the closing price of the Common Stock on the grant date, 85%
for non-qualified options. Options shall be exercisable as specified by the
Compensation Committee. Generally, options are exercisable in cumulative annual
installments of 25% per year beginning one year after the date of grant.
<PAGE>
Pursuant to the 1995 Outside Directors Stock Option Plan ("Outside Directors
Plan") adopted by the Board of Directors on August 1, 1995, and the shareholders
of the Company on November 21, 1995, options are granted to members of the Board
of Directors who are not employees or 10% owners of the Company (an "Outside
Director"). An aggregate of 125,000 shares of Common Stock are reserved for
issuance under the Outside Directors Plan. All options granted under the Outside
Directors Plan are exercisable in full beginning sixty days after date of grant
of the option. The Outside Directors Plan requires that options granted
thereunder will expire not later than ten years after the date of grant.

The Company applies APB 25 and related Interpretations in accounting for
its option plans. Accordingly, no compensation cost has been recognized for
options granted under its option plans. Had compensation cost for the Company's
option plans been determined based on the fair value at the grant dates for
awards under the option plans consistent with the method of SFAS 123, the
Company's net income and earnings per share would have been reduced to the pro
forma amounts indicated as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Net income-as reported $5,296 $2,570 $7,329
Net income-pro forma 4,123 1,193 6,166
Earnings per share-as reported
Basic $ 0.72 $ 0.37 $ 1.07
Diluted 0.70 0.35 0.97
Earnings per share-pro forma
Basic $ 0.56 $ 0.17 $ 0.90
Diluted 0.54 0.16 0.82

</TABLE>

Under SFAS 123, the fair value of each option grant is estimated on the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumption:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Expected dividend yield 0% 0% 0%
Risk free interest rate 5.00% 5.25% 5.25%
Expected volatility 89% 106% 106%
Expected life 4 years 4 years 4 years
</TABLE>

A summary of the status of the Company's stock option plans as of September 30,
1999, 1998 and 1997, and changes during the years ending on those dates is
presented below:
<TABLE>
<CAPTION>

Year ended September 30,
-------------------------------------------------------------------------------------
1999 1998 1997
---------------------- --------------------------- -------------------------

Weighted- Weighted- Weighted-
Average Average Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
------ -------------- ------ -------------- ------ --------------
Options
- -------
<S> <C> <C> <C> <C> <C> <C>

Outstanding at beginning of year 888,019 $10.07 931,054 $10.03 839,800 $4.71
Granted 292,577 11.21 195,875 17.29 267,500 22.12
Exercised ( 48,112) 4.87 (89,553) 2.64 (161,396) 2.51
Cancelled (180,241) 16.50 (149,357) 23.75 (14,850) 10.11
-------- -------- --------

Outstanding at end 952,243 9.24 888,019 10.07 931,054 10.03
of year

Options exercisable 487,229 7.38 428,904 6.77 348,634 3.85
at end of year
</TABLE>
<PAGE>
Included in the cancelled options above are 119,125 options with exercise prices
of $8.50-$31.50 and 50,950 options with exercise prices of $30.75 - $33.00 which
were cancelled and reissued at a lower exercise price during fiscal 1999 and
1998, respectively. In conjunction with the changes in exercise price, the
vesting schedule for all such options was revised to begin as of the new
issuance date.

During 1999 and 1998, the Company issued 48,112 and 89,553 shares of common
stock, respectively, pursuant to exercises of options granted under its
qualified stock option plans. Such shares were issued at an average price of
$4.87 and $2.64 per share and a total of $246 and $231 in 1999 and 1998,
respectively. Such exercises also gave rise to tax benefits of $114 and $95,
included in equity in 1999 and 1998, respectively.

The following table summarizes information about stock options outstanding at
September 30, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------- -------------------
Weighted-Average
Remaining Weighted- Weighted-
Range of Exercise Number Contractual Average Number Average
Prices Outstanding Life Exercise Price Exercisable Exercise Price
------------------- ----------- ------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$0.68 -$ 0.68 38,300 4.09 $0.68 38,300 $0.68
1.50 - 1.50 88,000 5.85 1.50 88,000 1.50
2.63 - 4.00 99,662 6.17 3.41 80,966 3.59
6.00 - 7.65 74,964 8.53 6.40 5,300 7.65
8.50 - 8.50 243,908 6.94 8.50 182,428 8.50
8.88 - 12.13 89,000 8.96 10.87 16,001 10.64
12.75 - 12.75 163,000 9.21 12.75 - -
12.81 - 17.00 120,034 7.98 15.95 53,084 16.20
19.63 - 25.00 27,375 8.00 20.86 15,900 20.78
25.25 - 27.25 8,000 8.14 27.00 7,250 27.18
----------- -----------
$0.68-$27.25 952,243 7.52 $ 9.24 487,229 $7.38
</TABLE>

13. GEOGRAPHIC INFORMATION

Certain geographic information follows:
<TABLE>
<CAPTION>
UNITED SOUTH
STATES CANADA MEXICO FAR EAST EUROPE AMERICA CONSOLIDATED
------ ------ ------ -------- -------- ------- ------------
1999
- ----
<S> <C> <C> <C> <C> <C> <C> <C>

Sales to unaffiliated customers ........... $ 90,536 $ 29,550 $ 36,219 $ 1,607 $ 5,114 $ 3,288 $ 166,314
Operating profit (loss) ................... 3,358 6,570 3,205 (24) (840) 612 12,881
Identifiable assets ....................... 52,103 21,881 28,672 397 8,947 12,560 124,560

1998
- ----
Sales to unaffiliated customers ........... $ 89,796 $ 6,724 $ 28,918 $ 412 $ 2,501 $ - $ 128,351
Operating profit (loss) ................... 3,555 1,217 1,979 (102) (672) - 5,977
Identifiable assets ....................... 45,971 18,907 18,950 115 5,078 - 89,021

1997
- ----
Sales to unaffiliated customers ........... $ 86,143 $ - $ 26,369 $ - $ 275 $ - $ 112,787
Operating profit (loss).................... 9,349 - 3,536 - (32) - 12,853
Identifiable assets ....................... 34,714 - 16,391 - 3,025 - 54,130
</TABLE>

<PAGE>

14. QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Year ended September 30, 1999
Net sales ......................... $41,241 $43,638 $42,985 $38,450
Gross profit ...................... 7,080 7,804 7,508 5,410
Net income......................... 1,292 1,663 1,756 585
Earnings per share (Diluted)....... $ 0.17 $ 0.22 $ 0.23 $ 0.08

Year ended September 30, 1998
Net sales ......................... $31,462 $30,373 $32,333 $34,183
Gross profit ...................... 5,013 5,192 5,240 5,693
Net income (loss).................. 849 (20) 972 769
Earnings per share (Diluted)....... $ 0.11 $ 0.00 $ 0.13 $ 0.11

</TABLE>
The amounts disclosed above do not agree with previously reported results due to
the reclassification of certain expenses between cost of sales and selling,
general and administrative expenses.

<PAGE>

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 1997, 1998, 1999
(dollars in thousands)

<TABLE>
<CAPTION>
Additions
---------

Charged Charged
Balance at to costs to other Balance at
beginning and accounts Deductions end of
Description of period expenses describe describe period
- ----------- --------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C>

Year ended September 30, 1997:
Allowance for doubtful accounts .. $ 164 $ 232 $ 8(3) $ 182(2) $ 222
Inventory Reserve ................ 627 55 11(3) - 693

Year ended September 30, 1998:
Allowance for doubtful accounts .. 222 41 132(4) 69(2) 326
Inventory Reserve ................ 693 78 680(4) 154(1) 1,297

Year ended September 30, 1999:
Allowance for doubtful accounts .. 326 101 - 69(2) 358
Inventory reserve ................ 1,297 41 - - 1,338

(1) Due to disposal of excess and obsolete inventory
(2) Due to write off of bad debt
(3) Due to acquisition of Corma
(4) Due to acquisition of Antrum
</TABLE>
<PAGE>
THE JPM COMPANY

EXHIBIT INDEX

Exhibits marked with a single asterisk are filed herewithin, and exhibits marked
with a double asterisk reference a management contract, compensatory plan or
arranagement, filed in response to Item 14(a)(3) of the instructions to Form
10-K. The other exhibits listed have previously been filed with the Commission
and are incorporated herein by reference.

<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Company (A)

3.2 Amended and Restated Bylaws of the Company (A)

4.1 Specimen Certificate of Common Stock of the Company (A)

4.2 Registration Rights Agreement (B)

10.1** Employment Agreement dated June 1, 1998, by and between Charles W. McDonald and The JPM Company (C)

10.2** Employment Agreement dated July 1, 1998, by and between Therese M. Miller and The JPM Company (C)

10.3** Employment Agreement dated July 1, 1998, by and between Jose R. Loza Jimenez and The JPM Company (C)

10.4** Employment Agreement dated October 14, 1997, by and between Wayne A. Bromfield and The JPM Company (D)

10.5** Employment Agreement dated May 1, 1995, by and between Maria Luisa Lozano and Electronica Pantera S.A. de C.V. (A)

10.6** Employment Agreement dated May 1, 1995, by and between Robert Verbosh and Electronica Pantera S.A. de C.V. (A)

10.7** Employment Agreement dated December 9, 1994, by and between John M. Spangler and The JPM Company (A)

10.8** Employment Agreement dated December 9, 1994, by and between Robert R. Langton and The JPM Company (A)

10.9** Employment Agreement dated September 21, 1990, by and between John H. Mathias and The JPM Company (A)

10.10** Employment Agreement dated September 21, 1990, by and between James P. Mathias and The JPM Company (A)

10.11** Employment Agreement dated March 12, 1996, by and between William D. Baker and The JPM Company (A)

10.12** Employment Agreement dated April 26, 1999, by and between David J. Surgala and The JPM Company (G)

10.13** Employment Agreement dated May 19, 1999, by and between Gary L. Lambert and The JPM Company (G)

10.14** Management Agreement between AF Datalink Equipamentos de Telecomunicacoes, Ltda., and Fritz Juninger (F)

10.15** Management Agreement between AF Datalink Equipamentos de Telecomunicacoes, Ltda., and Abelardo Quindere
Fraga Junior (F)

10.16** The JPM Company 1995 Stock Option Plan (A)

10.17** The JPM Company 1995 Outside Directors Stock Option Plan (A)

10.18** The JPM Company 1993 Stock Option Plan (A)

10.19** The JPM Company Deferred Compensation/Profit Sharing Plan (A)

10.20** Form of Non-Qualified Deferred Compensation Agreement with Key Employees (A)

10.21** The JPM Company Deferred Compensation Plan for Messrs. John H. and James P. Mathias (A)

10.22** Revolving Line of Credit Business Loan Agreement by and between The JPM Company and CoreStates (C)

10.23 Amendment and Modification to Loan Agreement dated December 17, 1998 between The JPM Company and First Union
National Bank (F)

10.24 Explanation and Waiver of Rights Regarding Confession of Judgement (F)

10.25 Amended and Restated Revolver Note (F)

10.26 Amended and Restated Revolver Note (F)

10.27 Amended and Restated Revolver Note (F)

10.28 Amended and Restated Revolver Note (F)

10.29 Stock Purchase Agreement between JPM and Datalink Equipamentos de Telecomunicacaoes Ltda. (E)

10.30 Demand Note between JPM Delaware and Abelardo Fraga Jr. (E)

10.31 Demand Note between JPM Delaware and Fritz Jungiger (E)

10.32 Open-Ended Mortgage and Security Agreement dated May 12, 1995, from The JPM Company to the Commonwealth Bank,
a division of Meridian (A)

10.33 Agreement with Diebold, Inc. dated July 1, 1993, for sale of manufacture and service of electronic components (A)

21.1* Subsidiaries of the Registrant

23.1* Consent of PricewaterhouseCoopers LLP

27.1* Financial Data Schedule
</TABLE>

(A) Incorporated by reference from Registrant's Registration Statement on Form
S-1 filed with the Securities and Exchange Commission on February 9, 1996, as
amended.

(B) Incorporated by reference from Registrant's Proxy Statement for a Special
Meeting of Shareholders dated and filed with the Securities and Exchange
Commission on May 5, 1997.

(C) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, filed with the Securities and Exchange
Commission on August 14, 1998.

(D) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended December 31, 1997, filed with the Securities and
Exchange Commission on February 12, 1998.

(E) Incorporated by reference from the Regitrant's Annual Report on Form 10-K
for the year ended September 30, 1998, filed with the Securities and Exchange
Commission on December 22, 1998.

(F) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended December 31, 1998, filed with the Securities and
Exchange Commission on February 10, 1999.

(G) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1999, filed with the Securities and Exchange
Commission on August 13, 1999.

LIST OF SUBSIDIARIES OF THE JPM COMPANY

The JPM Company of Delaware, a Delaware corporation
JPM Technology, Inc., a Delaware corporation
Denron, Inc., a California corporation
JPM Cable Assembly PTE, LTD., a Singapore corporation
JPM Czech Republic Spol S.R.O., a Czech Republic corporation
JPM Deutschland GmbH, a Federal Republic of Germany corporation
The JPM Company of Mexico, S.A. de C.V., a Mexico corporation
Electronica Pantera S.A. de C.V., a Mexico corporation
The JPM Company of Canada, a Canada corporation
Antrum Interface 725 Ltd., a Canada corporation
Ulmin S.A., an Uruguay corporation
Datalink Participacoes S/C Ltda., a Brazil corporation
AF Datalink Equipamentos de Telecomunicacoes Ltda., a Brazil corporation

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 (No. 333-34945) and in the Registration Statements on Form
S-8 (Nos. 333-19769, 333-19885, 333-19953 and 333-24315) of The JPM Company of
our report dated November 8, 1999 relating to the financial statements and
financial statement schedule, which appear in this Form 10-K.

PricewaterhouseCoopers LLP

Philadelphia, PA
December 27, 1999

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF THE JPM COMPANY AND SUBSIDIARIES AND
IS QUALIFIED IN ITS ENTIRETY BE REFERENCE TO SUCH FINANCIAL STATEMENTS.

</LEGEND>
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<CASH> 969
<SECURITIES> 0
<RECEIVABLES> 21,755
<ALLOWANCES> 358
<INVENTORY> 37,227
<CURRENT-ASSETS> 65,753
<PP&E> 31,164
<DEPRECIATION> 11,389
<TOTAL-ASSETS> 124,560
<CURRENT-LIABILITIES> 29,461
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 38,873
<TOTAL-LIABILITY-AND-EQUITY> 124,560
<SALES> 166,314
<TOTAL-REVENUES> 166,314
<CGS> 138,512
<TOTAL-COSTS> 138,512
<OTHER-EXPENSES> 178
<LOSS-PROVISION> 101
<INTEREST-EXPENSE> 3,912
<INCOME-PRETAX> 8,978
<INCOME-TAX> 3,245
<INCOME-CONTINUING> 5,296
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,296
<EPS-BASIC> .72
<EPS-DILUTED> .70

</TABLE>