<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9078
------------------------
THE ALPINE GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-1620387
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1790 BROADWAY 10019-1412
NEW YORK, NEW YORK (Zip code)
(Address of principal executive
offices)
</TABLE>
212-757-3333
Registrant's telephone number, including area code
------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes / / No /X/
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT AUGUST 4, 2000
---------------------------- ------------------------------
<S> <C>
Common Stock, $.10 Par Value 13,895,734
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the requirements of Form 10-Q and, therefore,
do not include all information and footnotes required by generally accepted
accounting principles. However, in the opinion of management, all adjustments
(which, except as disclosed elsewhere herein, consist only of normal recurring
accruals) necessary for a fair presentation of the results of operations for the
relevant periods have been made. Results for the interim periods are not
necessarily indicative of the results to be expected for the year. These
financial statements should be read in conjunction with the summary of
significant accounting policies and the notes to the consolidated financial
statements included in the Company's Transition Report on Form 10-K for the
eight month period ended December 31, 1999.
2
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 9,180 $ 19,542
Marketable securities..................................... 8,132 7,841
Accounts receivable (less allowance for doubtful accounts
of $3,000 and $3,193 at June 30, 2000 and December 31,
1999 and, respectively)................................. 310,184 261,263
Inventories............................................... 270,048 313,571
Other current assets...................................... 44,163 42,262
---------- ----------
Total current assets.................................... 641,707 644,479
Property, plant and equipment, net.......................... 531,715 515,763
Long-term investments and other assets...................... 213,976 226,606
Goodwill (less accumulated amortization of $38,715 and
$28,399 at June 30, 2000 and December 31, 1999,
respectively) 786,067 796,781
---------- ----------
Total assets............................................ $2,173,465 $2,183,629
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings..................................... $ 160,000 $ 140,369
Current portion of long-term debt......................... 87,158 85,910
Accounts payable.......................................... 156,962 147,336
Accrued expenses.......................................... 89,329 100,843
---------- ----------
Total current liabilities............................... 493,449 474,458
Long-term debt, less current portion........................ 1,240,016 1,253,020
Minority interest in subsidiaries........................... 66,966 66,459
Other long-term liabilities................................. 156,418 160,750
---------- ----------
Total liabilities....................................... 1,956,849 1,954,687
---------- ----------
Subsidiary-obligated Mandatorily Redeemable Trust
Convertible Preferred Securities of Superior Trust I
holding solely convertible debentures of Superior, net
of discount............................................. 134,436 133,959
Commitments and contingencies
Stockholders' equity:
9% cumulative convertible preferred stock at liquidation
value................................................... 427 427
Common stock, $.10 par value; 25,000,000 shares
authorized; 21,715,272 shares and 21,633,041 shares
issued at June 30, 2000 and December 31, 1999,
respectively............................................ 2,171 2,166
Capital in excess of par value............................ 159,413 158,268
Accumulated other comprehensive income (deficit).......... (13,439) 451
Retained earnings......................................... 29,713 27,056
---------- ----------
178,285 188,368
Shares of common stock in treasury, at cost: June 30,
2000, 7,766,616 shares; December 31, 1999, 7,418,534
shares.................................................. (95,155) (92,396)
Receivable from stockholders................................ (950) (989)
---------- ----------
Total stockholders' equity................................ 82,180 94,983
---------- ----------
Total liabilities and stockholders' equity.............. $2,173,465 $2,183,629
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
-------------------------
2000 1999
-------- --------
<S> <C> <C>
Net sales................................................... $547,217 $514,691
Cost of goods sold.......................................... 448,522 413,411
-------- --------
Gross profit.............................................. 98,695 101,280
Selling, general and administrative expenses................ 41,413 37,868
Nonrecurring and unusual charges............................ 2,956 2,030
Amortization of goodwill.................................... 5,249 5,093
-------- --------
Operating income.......................................... 49,077 56,289
Interest expense............................................ (34,779) (30,182)
Other income (expense), net................................. (1,116) 4,590
-------- --------
Income from continuing operations before income taxes,
distributions on preferred securities of subsidiary
trust, minority interest, equity in earnings of
affiliate and extraordinary (loss)...................... 13,182 30,697
Provision for income taxes.................................. (5,633) (12,315)
-------- --------
Income from continuing operations before distributions on
preferred securities of subsidiary trust, minority
interest, equity in earnings of affiliate and
extraordinary (loss).................................... 7,549 18,382
Distributions on preferred securities of subsidiary trust... (3,797) (3,756)
-------- --------
Income from continuing operations before minority
interest, equity in earnings of affiliate and
extraordinary (loss).................................... 3,752 14,626
Minority interest in earnings of subsidiaries............... (2,147) (7,055)
Equity in earnings of affiliate............................. 1,209 1,079
-------- --------
Income from continuing operations before extraordinary
(loss).................................................. 2,814 8,650
Loss from discontinued operations, net of tax............... -- (2,011)
-------- --------
Income before extraordinary (loss)........................ 2,814 6,639
Extraordinary (loss) on early extinguishment of debt, net... -- (836)
-------- --------
Net income................................................ 2,814 5,803
Preferred stock dividends................................... (17) (10)
-------- --------
Net income applicable to common stock..................... $ 2,797 $ 5,793
======== ========
Net income per share of common stock:
Basic:
Income from continuing operations....................... $0.19 $0.58
Loss from discontinued operations....................... -- (0.13)
Extraordinary (loss) on early extinguishment of debt,
net.................................................... -- (0.06)
-------- --------
Net income per basic share of common stock............ $0.19 $0.39
======== ========
Diluted:
Income from continuing operations....................... $0.18 $0.49
Loss from discontinued operations....................... -- (0.12)
Extraordinary (loss) on early extinguishment of debt,
net.................................................... -- (0.05)
-------- --------
Net income per diluted share of common stock.......... $0.18 $0.32
======== ========
Weighted average shares outstanding:
Basic..................................................... 14,893 14,982
======== ========
Diluted................................................... 15,202 16,650
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
4
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------
2000 1999
---------- ----------
<S> <C> <C>
Net sales................................................... $1,043,109 $1,021,527
Cost of goods sold.......................................... 858,792 820,057
---------- ----------
Gross profit.............................................. 184,317 201,470
Selling, general and administrative expenses................ 81,739 81,719
Nonrecurring and unusual charges............................ 8,812 4,552
Amortization of goodwill.................................... 10,481 9,330
---------- ----------
Operating income.......................................... 83,285 105,869
Interest expense............................................ (68,075) (61,350)
Other income, net........................................... 3,145 5,574
---------- ----------
Income from continuing operations before income taxes,
distributions on preferred securities of subsidiary
trust, minority interest, equity in earnings of
affiliate and extraordinary (loss)...................... 18,355 50,093
Provision for income taxes.................................. (8,191) (21,384)
---------- ----------
Income from continuing operations before distributions on
preferred securities of subsidiary trust, minority
interest, equity in earnings of affiliate and
extraordinary (loss).................................... 10,164 28,709
Distributions on preferred securities of subsidiary trust... (7,559) (3,756)
---------- ----------
Income from continuing operations before minority
interest, equity in earnings of affiliate and
extraordinary (loss).................................... 2,605 24,953
Minority interest in earnings of subsidiaries............... (1,512) (14,369)
Equity in earnings of affiliate............................. 1,591 977
---------- ----------
Income from continuing operations before extraordinary
(loss).................................................. 2,684 11,561
Loss from discontinued operations, net of tax............... -- (3,278)
---------- ----------
Income before extraordinary (loss)........................ 2,684 8,283
Extraordinary (loss) on early extinguishment of debt, net... -- (836)
---------- ----------
Net income................................................ 2,684 7,447
Preferred stock dividends................................... (27) (19)
---------- ----------
Net income applicable to common stock..................... $ 2,657 $ 7,428
========== ==========
Net income per share of common stock:
Basic:
Income from continuing operations....................... $0.18 $0.76
Loss from discontinued operations....................... -- (0.22)
Extraordinary (loss) on early extinguishment of debt,
net.................................................... -- (0.05)
---------- ----------
Net income per basic share of common stock............ $0.18 $0.49
========== ==========
Diluted:
Income from continuing operations....................... $0.17 $0.65
Loss from discontinued operations....................... -- (0.20)
Extraordinary (loss) on early extinguishment of debt,
net.................................................... -- (0.04)
---------- ----------
Net income per diluted share of common stock.......... $0.17 $0.41
========== ==========
Weighted average shares outstanding:
Basic..................................................... 14,950 15,229
========== ==========
Diluted................................................... 15,356 16,697
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL 9% CUMULATIVE
IN CONVERTIBLE
COMMON STOCK EXCESS PREFERRED STOCK
COMPREHENSIVE --------------------- OF PAR ------------------- RETAINED
LOSS SHARES AMOUNT VALUE SHARES AMOUNT EARNINGS
-------------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999... 21,663,041 $2,166 $158,268 427 $427 $27,056
Exercise of stock options...... 17,500 2 88
Employee stock purchase plan... 24,770 2 224
Purchase of treasury stock.....
Compensation expense related to
stock options and grants..... 9,961 1 833
Dividends on preferred stock... (27)
Comprehensive loss:
Net income................... $ 2,684 2,684
Foreign currency translation
adjustment................. (427)
Change in unrealized gains
and losses on securities,
net of tax................. (13,463)
--------
Total comprehensive loss....... $(11,206)
======== ---------- ------ -------- ---- ---- -------
Balance at June 30, 2000....... 21,715,272 $2,171 $159,413 427 $427 $29,713
========== ====== ======== ==== ==== =======
<CAPTION>
OTHER
COMPREHENSIVE TREASURY STOCK RECEIVABLE
INCOME --------------------- FROM
(DEFICIT) SHARES AMOUNT STOCKHOLDERS TOTAL
-------------- ---------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1999... $ 451 (7,418,534) $(92,396) $(989) $ 94,983
Exercise of stock options...... 90
Employee stock purchase plan... 226
Purchase of treasury stock..... (398,413) (3,382) (3,382)
Compensation expense related to
stock options and grants..... 50,331 623 39 1,496
Dividends on preferred stock... (27)
Comprehensive loss:
Net income................... 2,684
Foreign currency translation
adjustment................. (427) (427)
Change in unrealized gains
and losses on securities,
net of tax................. (13,463) (13,463)
Total comprehensive loss.......
-------- ---------- -------- ----- --------
Balance at June 30, 2000....... $(13,439) (7,766,616) $(95,155) $(950) $ 82,180
======== ========== ======== ===== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
-------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Income from continuing operations......................... $ 2,684 $ 11,561
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization......................... 30,872 28,036
Amortization of deferred debt issuance costs and
accretion of debt discount.......................... 2,756 2,906
Compensation expense related to stock options and
grants.............................................. 1,624 715
Provision (benefit) for deferred income taxes......... 3,346 1,516
Minority interest in earnings (loss) of
subsidiaries........................................ 1,512 14,369
Equity in earnings of affiliates...................... (1,591) (977)
Other, net............................................ (220) --
Change in assets and liabilities, net of effects from
companies acquired:
Accounts receivable................................. (48,704) (60,366)
Inventories......................................... 43,730 15,062
Other current and non-current assets................ 168 14,747
Accounts payable and accrued expenses............... (4,429) 21,907
Other long-term liabilities......................... 1,598 (250)
-------- --------
Cash flows provided by continuing operations................ 33,346 49,226
Cash flows provided by discontinued operations.............. -- 7,187
-------- --------
Cash flows provided by operating activities................. 33,346 56,413
-------- --------
Cash flows from investing activities:
Capital expenditures...................................... (44,193) (28,907)
Proceeds from sale of assets.............................. 5,722 503
Customer loans............................................ (11,758) (14,377)
Other..................................................... 1,032 (1,629)
-------- --------
Cash flows used for continuing operations................... (49,197) (44,410)
Cash flows used for discontinued operations................. -- (1,540)
-------- --------
Cash flows used for investing activities.................... (49,197) (45,950)
-------- --------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
7
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
2000 1999
-------- ---------
<S> <C> <C>
Cash flows from financing activities:
Borrowings under revolving credit facilities, net......... $ 8,865 $ 11,906
Short-term borrowings, net................................ 19,631 36,910
Repayment of long-term borrowings......................... (51,454) (235,808)
Long-term borrowings...................................... 30,828 213,827
Debt issuance costs....................................... -- (6,294)
Proceeds from exercise of stock options................... 89 400
Purchase of treasury shares............................... (3,382) (14,741)
Subsidiary treasury stock purchases....................... -- (10,932)
Dividends on subsidiary common stock...................... -- (2,511)
Other..................................................... 912 (4,692)
-------- ---------
Cash flows provided by continuing operations................ 5,489 (11,935)
Cash flows provided by discontinued operations.............. -- 363
-------- ---------
Cash flows provided by (used for) financing activities...... 5,489 (11,572)
-------- ---------
Cash flows provided by discontinued operations.............. -- 6,010
Net increase in discontinued operations cash and cash
equivalents............................................... -- 6,010
Net decrease in continuing operations cash and cash
equivalents............................................... (10,362) (7,119)
Cash and cash equivalents at beginning of period............ 19,542 26,308
-------- ---------
Cash and cash equivalents at end of period.................. $ 9,180 $ 25,199
======== =========
Supplemental disclosures:
Cash paid for interest.................................... $ 60,037 $ 60,474
======== =========
Cash paid for income taxes, net of refunds................ $ 6,722 $ 7,534
======== =========
Acquisition of Essex minority interest:
Net assets acquired including goodwill.................. $ 83,044
Minority interest in subsidiary......................... 50,246
---------
Issuance of subsidiary-obligated Mandatorily Redeemable
Trust Convertible Preferred Securities of Superior
Trust I holding solely convertible debentures of
Superior (net of discount of $33,323)................. $ 133,290
=========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
8
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of The Alpine Group, Inc. and its majority-owned subsidiary
(collectively, unless the context otherwise requires, "Alpine" or the
"Company"). Certain reclassifications have been made to the prior period
presentation to conform to the current period presentation.
Alpine's operations are carried out through Superior TeleCom Inc. (together
with its subsidiaries, unless the context otherwise requires, "Superior"), a
51.7% owned subsidiary, which manufactures wire and cable products for the
communications, original equipment manufacturer ("OEM") and electrical markets.
Alpine also holds a 48% common equity interest and $19.8 million of
convertible preferred stock in PolyVision Corporation, a global manufacturer of
visual communications and related products. Alpine currently accounts for its
investment in PolyVision under the equity method of accounting.
On August 6, 1999, Alpine sold its subsidiary, Premier Refractories
International Inc. ("Premier"), to Cookson Group plc. Accordingly, Premier has
been accounted for as a discontinued operation in the accompanying condensed
consolidated financial statements. The operating results of Premier for the
three and six month periods ended June 30, 1999 have been segregated from the
Company's continuing operations and are reported as a separate line item on the
statement of operations as discontinued operations.
2. INVENTORIES
At June 30, 2000 and December 31, 1999, the components of inventories were
as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
-------- ------------
(IN THOUSANDS)
<S> <C> <C>
Raw materials......................................... $ 47,562 $ 50,618
Work in process....................................... 48,038 42,150
Finished goods........................................ 189,523 233,142
-------- --------
285,123 325,910
LIFO reserve.......................................... (15,075) (12,339)
-------- --------
$270,048 $313,571
======== ========
</TABLE>
Inventories valued using the LIFO method amounted to $137.0 million and
$167.3 million at June 30, 2000 and December 31, 1999, respectively.
9
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
3. COMPREHENSIVE INCOME
The components of comprehensive income for the three and six months ended
June 30, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net income............................................... $ 2,814 $5,803 $ 2,684 $7,447
Foreign currency translation adjustment.................. (1,045) 153 (427) 47
Change in unrealized gains and losses on securities, net
of tax................................................. 8,254 -- (13,463) --
Additional minimum pension liability..................... -- (694) -- (694)
------- ------ -------- ------
Comprehensive income (loss).............................. $10,023 $5,262 $(11,206) $6,800
======= ====== ======== ======
</TABLE>
4. ACQUISITIONS
On November 27, 1998, Superior completed a cash tender offer for 81% of the
outstanding common stock of Essex International Inc. ("Essex"), at an aggregate
cash tender value of $770 million. On March 31, 1999, Superior acquired the
remaining outstanding common stock of Essex through the issuance of
approximately $167 million (face amount) of 8 1/2% Subsidiary-obligated
Mandatorily Redeemable Trust Convertible Preferred Securities of Superior Trust
I holding solely convertible debentures of Superior. The sole assets of Superior
Trust I are the $171.8 million (principal amount) of convertible debentures of
Superior, which bear interest at an annual rate of 8 1/2%. The convertible
debentures mature on March 30, 2014.
The acquisition of Essex was accounted for using the purchase method and,
accordingly, the results of operations of Essex have been included in the
consolidated financial statements on a prospective basis from the dates of
acquisition. The purchase price was allocated based upon assessments of the fair
values of assets and liabilities at the dates of acquisition, which included
accruals for planned consolidations, overhead rationalization and loss
contingencies. The excess of the purchase price over the net assets acquired is
being amortized on a straight-line basis over 40 years.
PRO FORMA FINANCIAL DATA
Unaudited condensed pro forma results of operations for the six months ended
June 30, 1999, which give effect to the March 31, 1999 acquisition of the
remaining 19% of the outstanding common stock of Essex as if it had occurred on
January 1, 1999, are presented below. The pro forma amounts reflect
acquisition-related purchase accounting adjustments, including adjustments to
depreciation and amortization expense and certain other adjustments, together
with related income tax effects. The pro forma financial information does not
purport to be indicative of either the results of operations that would have
occurred if the transaction had taken place at the beginning of the period
presented or of the future results of operations.
10
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
4. ACQUISITIONS (CONTINUED)
PRO FORMA FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
---------------------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C>
Net sales................................................... $1,021,527
Income from continuing operations before income taxes,
distribution on preferred securities of subsidiary trust,
minority interest and extraordinary (loss)................ 41,791
Income from continuing operations before extraordinary
(loss).................................................... 10,878
Loss from discontinued operations........................... (3,278)
Extraordinary (loss) on early extinguishment of debt, net... (836)
Net income applicable to common stock....................... 6,745
Net income per diluted share of common stock:
Income from continuing operations before extraordinary
(loss).................................................. $ 0.60
Loss from discontinued operations......................... (0.20)
Extraordinary (loss) on early extinguishment of debt,
net..................................................... (0.04)
----------
Net income per diluted share of common stock............ $ 0.36
==========
</TABLE>
5. RESTRUCTURING ACCRUAL
ESSEX
Since the completion of the acquisition of Essex, the Company has been
involved in the consolidation and integration of manufacturing, corporate and
distribution functions of Essex into Superior. As a result, Superior initially
accrued as part of the Essex acquisition purchase price a $29.7 million
provision, which included $11.8 million of employee termination and relocation
costs, $11.9 million of facility consolidation costs, $4.4 million of management
information system project termination costs, and $1.6 million of other exit
costs. During 1999, Superior revised its estimate and, as a result, increased
the provision for employee termination and relocation costs, facility
consolidation costs, and other exit costs by $6.1 million, $0.2 million and
$1.3 million, respectively, and decreased the provision for management
information system project termination costs by $1.4 million. The net increase
to the accrual of $6.2 million was reflected as an increase in goodwill. As of
June 30, 2000, $17.0 million, $9.5 million, $3.0 million and $1.9 million have
been incurred and paid related to employee termination and relocation costs,
facility consolidation costs, management information system project termination
costs and other exit costs, respectively. The provision for employee termination
and relocation costs was primarily associated with selling, general and
administrative functions within Essex. The provision for facility consolidation
costs included both manufacturing and distribution facility rationalization and
the related costs associated with employee severance. The restructuring resulted
in the severance of approximately 1,100 employees. All significant aspects of
the plan are complete.
11
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
5. RESTRUCTURING ACCRUAL (CONTINUED)
SUPERIOR ISRAEL
During 1999, Superior's 51% owned Israeli subsidiary, Superior Cables
Limited ("Superior Israel"), recorded a $1.3 million restructuring charge, which
included a provision for the consolidation of manufacturing facilities. As of
June 30, 2000, $1.3 million has been incurred and paid. The restructuring
actions eliminated approximately 35 positions, most of which were manufacturing
related employees. All aspects of the restructuring plan are complete.
6. EARNINGS PER SHARE
The computation of basic and diluted earnings per share for the three and
six months ended June 30, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------------------------------------------
2000 1999
------------------------------ ------------------------------
PER PER
NET SHARE NET SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
-------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations.................. $2,814 $8,650
Less: preferred stock dividends.................... (17) (10)
------ ------
Basic earnings per common share from continuing
operations....................................... 2,797 14,893 $0.19 8,640 14,982 $0.58
===== =====
Dilutive impact of stock options, warrants and
grants........................................... -- 309 -- 1,618
Dilution in subsidiary and affiliate earnings from
common stock equivalents......................... (69) -- (450) --
Assumed conversion of preferred stock.............. -- -- 9 50
------ ------ ------ ------
Diluted earnings per common share from continuing
operations....................................... $2,728 15,202 $0.18 $8,199 16,650 $0.49
====== ====== ===== ====== ====== =====
</TABLE>
12
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
6. EARNINGS PER SHARE (CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------------------------------
2000 1999
------------------------------ ------------------------------
PER PER
NET SHARE NET SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
-------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations................. $2,684 $11,561
Less: preferred stock dividends................... (27) (19)
------ -------
Basic earnings per common share from continuing
operations...................................... 2,657 14,950 $0.18 11,542 15,229 $0.76
===== =====
Dilutive impact of stock options, warrants and
grants.......................................... -- 406 -- 1,418
Dilution in subsidiary and affiliate earnings from
common stock equivalents........................ (71) -- (680) --
Assumed conversion of preferred stock............. -- -- 19 50
------ ------ ------- ------
Diluted earnings per common share from continuing
operations...................................... $2,586 15,356 $0.17 $10,881 16,697 $0.65
====== ====== ===== ======= ====== =====
</TABLE>
The Company has excluded from the diluted earnings per share calculation the
assumed conversion of Superior's Trust Convertible Preferred Securities as the
impact would be anti-dilutive.
7. NONRECURRING AND UNUSUAL CHARGES
The Company incurred nonrecurring and unusual charges of $3.0 million and
$8.8 million during the three and six month periods ended June 30, 2000,
respectively. These charges related principally to the planned close down of
plants and consolidation of production capacity in Superior's building wire
(Electrical) operations. Such costs included relocation of equipment, training
of new employees and production inefficiencies associated with the
consolidation. The Company incurred nonrecurring and unusual charges of
$2.0 million and $4.6 million during the three and six month periods ended
June 30, 1999, respectively, which were primarily associated with the evaluation
of a management information system at Essex.
8. BUSINESS SEGMENTS
The Company's reportable segments are strategic businesses that offer
different products and services to different customers. These include Superior's
communications, OEM and electrical segments. The communications segment includes
(i) outside plant wire and cable for voice and data transmission in the local
loop portion of the telecommunications infrastructure and (ii) datacom or
premise wire and cable for use within homes and offices for local area networks,
Internet connectivity and other applications. The OEM segment includes magnet
wire and related products. The electrical segment includes building and
industrial wire and cable, and automotive wire.
13
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
8. BUSINESS SEGMENTS (CONTINUED)
The Company evaluates segment performance based on a number of factors, with
operating income being the most critical. Intersegment sales are generally
recorded at cost, are not significant and, therefore, have been eliminated
below.
Operating results for each of the Company's three reportable segments are
presented below. Corporate and other items shown below are provided to reconcile
to the Company's condensed consolidated statements of operations and balance
sheets.
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------- -----------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales:
Communications................................. $225,227 $197,823 $ 423,634 $ 391,886
OEM............................................ 157,061 146,496 318,403 293,182
Electrical..................................... 164,929 170,372 301,072 336,459
-------- -------- ---------- ----------
$547,217 $514,691 $1,043,109 $1,021,527
======== ======== ========== ==========
Operating income (loss):
Communications................................. $ 37,553 $ 38,463 $ 65,970 $ 72,642
OEM............................................ 20,401 22,163 42,238 41,553
Electrical..................................... 6,161 9,391 8,142 20,348
Corporate and other............................ (6,833) (6,605) (13,772) (14,792)
Amortization of goodwill....................... (5,249) (5,093) (10,481) (9,330)
Nonrecurring and unusual charges............... (2,956) (2,030) (8,812) (4,552)
-------- -------- ---------- ----------
$ 49,077 $ 56,289 $ 83,285 $ 105,869
======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
---------- ------------
<S> <C> <C>
Total assets:
Communications............................................ $ 530,005 $ 510,537
OEM....................................................... 300,900 274,103
Electrical................................................ 293,888 323,154
Corporate and other (including goodwill).................. 1,048,672 1,075,835
---------- ----------
$2,173,465 $2,183,629
========== ==========
</TABLE>
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Alpine Group, Inc. (together with its subsidiaries, unless the context
otherwise requires, "Alpine" or the "Company") is an industrial holding company
with investments in three industrial manufacturing companies.
SUPERIOR TELECOM INC.
Alpine holds a 51.7% common equity interest in its consolidated subsidiary,
Superior TeleCom Inc. (together with its subsidiaries, unless the context
otherwise requires, "Superior"), whose balance sheet accounts and results of
operations are consolidated with the financial statements of Alpine.
Superior manufactures a broad portfolio of wire and cable products grouped
into the following primary industry segments: (i) communications, (ii) original
equipment manufacturer ("OEM") and (iii) electrical. The Communications Group
includes communications wire and cable products sold to telephone companies,
distributors and systems integrators, principally in North America. In addition,
included within the Communications Group is Superior's 51% owned Israeli
subsidiary, Superior Cables Limited ("Superior Israel"), which manufactures a
range of wire and cable products in Israel, including communications cable,
power cable and other industrial and electronic wire and cable products. The OEM
Group includes magnet wire and accessory products for motors, transformers and
electrical controls sold primarily to OEMs. The Electrical Group includes
building and industrial wire for applications in commercial and residential
construction and industrial facilities and to a lesser degree, automotive and
specialty wiring assemblies for automobiles and trucks. Industry segment
financial data for Superior's principal industry segments is included in Note 8
to the accompanying condensed consolidated financial statements.
Copper is one of the principal raw materials used in Superior's wire and
cable product manufacturing. Fluctuations in the price of copper do affect per
unit product pricing and related revenues. However, the cost of copper has not
had a material impact on profitability as Superior, in most cases, has the
ability to adjust prices billed for its products to properly match the copper
cost component of its inventory shipped.
POLYVISION CORPORATION
Alpine holds a 48% common equity interest and $19.8 million of convertible
preferred stock in its unconsolidated affiliate, PolyVision Corporation
("PolyVision"), a global manufacturer of visual communications and related
products for the education/office markets, menus and merchandising boards for
food service and banking institutions, and high performance wall systems used in
the education, transportation and select architectural markets.
Alpine currently accounts for its investment in PolyVision under the equity
method of accounting resulting in recognition of Alpine's proportionate share of
PolyVision's earnings as a one-line item within the statement of operations.
DISCONTINUED OPERATIONS/COOKSON GROUP PLC
On August 6, 1999, Alpine completed the sale of its subsidiary, Premier
Refractories International Inc. ("Premier"), to Cookson Group plc ("Cookson").
The historical net operating results of Premier have been classified as
discontinued operations within the 1999 consolidated financial statements.
The sale of Premier was affected through the merger of Premier with a
wholly-owned subsidiary of Cookson. In connection with the transaction, Cookson
assumed all of Premier's existing indebtedness, issued to Alpine approximately
32.3 million ordinary shares of Cookson and paid to Alpine $15.6 million in
15
<PAGE>
cash. Immediately prior to the sale of Premier, Alpine acquired the 16.6%
minority equity interest in Premier for approximately $31.1 million in cash.
Alpine's current ownership of Cookson ordinary shares approximates 4%, with
such investment accounted for as an available for sale investment with
unrealized holding gains and losses reflected as a component of other
comprehensive income. Dividends paid on the Cookson ordinary shares are
recognized as other income in the statement of operations.
RESULTS OF OPERATIONS--THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2000 AS
COMPARED TO THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1999
Sales for the quarter ended June 30, 2000 were a record $547.2 million, an
increase of 6.3% as compared to sales of $514.7 million for the quarter ended
June 30, 1999. Adjusted for a constant cost of copper, the sales increase in the
June 2000 quarter as compared to the June 1999 quarter was approximately 0.1%.
The increase in copper adjusted sales for the June 30, 2000 quarter resulted
from comparative growth in sales in Superior's Communications Group, partially
offset by a comparative sales decline in Superior's Electrical Group.
Sales for Superior's Communications Group for the June 30, 2000 quarter were
a record $225.2 million, an increase of 8.5% on a copper adjusted basis over the
June 30, 1999 quarter, and an increase of 13.2% on a copper adjusted basis as
compared to the preceding quarter ended March 31, 2000. Sales growth in the
June 30, 2000 quarter as compared to the prior year June quarter was principally
due to a 78.5% increase in sales of broadband products (which include fiber
optic, copper premise and composite cables), with such product line reaching an
annualized revenue rate of approximately $125 million. Sales growth in this
product line is due to strong industry demand trends as well as market share
gains attributable to recent capacity additions, new product introductions and
broadened marketing and sales activities. June 30, 2000 quarterly sales of
outside plant (OSP) cables, which are sold principally to major telephone
companies, were approximately equivalent to copper adjusted sales for the prior
year June quarter; however, they reflected 13.5% sales growth on a copper
adjusted basis over sales in the preceding quarter ended March 31, 2000.
Sales for Superior's OEM Group were $157.1 million for the quarter ended
June 30, 2000, a copper adjusted increase of 2.3% as compared to the June 30,
1999 quarter. Sales of magnet wire, the OEM Group's principal product line,
increased 5.1% on a copper adjusted basis as compared to the corresponding
quarter of the prior year reflecting continuing growing demand from Superior's
major OEM customers.
Sales for Superior's Electrical Group were $164.9 million for the June 30,
2000 quarter, representing a decline of 11.1% on a copper-adjusted basis as
compared to the quarter ended June 30, 1999. Sales volume in the Electrical
Group was impacted by lower available productive capacity, a condition which has
existed through the first six months of 2000 as Superior has been in the process
of relocating and consolidating manufacturing equipment and capacity in its
building wire operations. The Company anticipates an increase in production
capacity during the second half of 2000 as it completes its equipment relocation
and capacity consolidation efforts.
Sales for the six month period ended June 30, 2000 were $1.043 billion, an
increase of 2.1% as compared to sales of $1.022 billion for the six month period
ended June 30, 1999. Adjusted for a constant cost of copper, sales actually
declined in the June 30, 2000 six month period by 4.2% as compared to the prior
year six month period. The comparative reduction in copper adjusted sales for
the current year six month period was due to a comparative decline of 19.1% in
Superior's Electrical Group sales and lower comparative sales in the March 31,
2000 quarter of Superior's Communications Group OSP cable products.
Gross profit for the June 30, 2000 quarter was $98.7 million, a decline of
$2.6 million as compared to gross profit of $101.3 million for the quarter ended
June 30, 1999. The gross profit percentage in the
16
<PAGE>
June 2000 quarter was 18.0%, a decline on a copper-adjusted basis of 50 basis
points as compared to the prior year June quarter. The decline in gross profit
and gross profit percentage was principally attributable to Superior's
Electrical Group, where lower sales and higher per unit production costs
negatively impacted the gross profit and margin. Per unit production costs in
Superior's Electrical Group during the current quarter were adversely affected
by lower production levels and the resulting negative impact of fixed cost
absorption on per unit costs, as well as by the impact of other production
inefficiencies resulting from the aforementioned manufacturing consolidation and
equipment relocation actions.
For the six month period ended June 30, 2000 the gross profit was
$184.3 million, a decline of 8.5% as compared to the prior year six month
period. The comparative reduction in gross profit was principally the result of
lower sales on a copper adjusted basis and lower gross profit margins in
Superior's Electrical Group associated with the aforementioned productivity and
production efficiency issues.
Selling, general and administrative expense ("SG&A expense") for the
June 30, 2000 quarter was $41.4 million, an increase of 9.4% as compared to SG&A
expense of $37.9 million for the June 30, 1999 quarter, with such increase
reflecting higher selling and marketing expenses to support the sales growth of
Superior's Communications Group broadband product line, higher SG&A expense at
Superior Israel resulting from its 1999 acquisition of a competitor, Pica Plast
Limited ("Pica Plast") and an increase in non-cash compensation expense charges
at Alpine Corporate. For the six months ended June 30, 2000, SG&A expense was
$81.7 million, which was equivalent to SG&A expense for the six month period
ended June 30, 1999 reflecting the impact of Superior's corporate restructuring
and overhead expense reductions initiated principally in the second quarter of
1999, offset by the aforementioned higher expense levels in the June 30, 2000
quarter.
Superior incurred nonrecurring and unusual charges of $3.0 million and
$8.8 million for the three and six month periods ended June 30, 2000,
respectively. The current period nonrecurring and unusual charges related
principally to the previously announced close down of plants, consolidation of
production capacity and related costs in Superior's building wire (Electrical)
operations. For the three and six month periods ended June 30, 1999, Superior
incurred nonrecurring and unusual charges of $2.0 million and $4.6 million,
respectively, which were primarily associated with the evaluation of a
management information system at Essex.
Operating income for the June 30, 2000 quarter was $49.1 million. Before
nonrecurring charges, operating income was $52.0 million, a decline of
$6.3 million as compared to the June 30, 1999 quarter. For the six month period
ended June 30, 2000, operating income (before nonrecurring charges) was
$92.1 million, a decline of $18.3 million as compared to the six month period
ended June 30, 1999. The comparative decline in operating income for the current
year three and six month periods was principally attributable to lower operating
income in Superior's Electrical Group and in Superior Israel where reduced
volumes to major customers, currency related pricing reductions, and
productivity inefficiencies resulting from manufacturing consolidations
negatively impacted profitability.
Interest expense for the three and six month periods ended June 30, 2000 was
$34.8 million and $68.1 million, respectively, representing an increase of
$4.6 million and $6.7 million, respectively, over the prior year three and six
month periods. The increase in interest expense was primarily the result of
higher short-term (LIBOR) interest rates in the current period and, to a lesser
degree, higher borrowings at Superior Israel associated with its November 1999
acquisition of Pica Plast.
Other expense amounted to $1.1 million for the three month period ended
June 30, 2000, with such expense being primarily due to currency translation
losses at Superior Israel on certain debt linked to non-functional currencies
(principally Euro-linked). For the six month period ended June 30, 2000 other
income was $3.1 million including $2.7 million in dividend income from the
Company's common equity investment in Cookson. For the three and six month
periods ended June 30, 1999 other income was $4.6 million and $5.6 million,
respectively, and included currency gains at Superior Israel as well as
investment income earned on certain corporate managed fund accounts.
17
<PAGE>
For the three and six month periods ended June 30, 2000 the Company recorded
minority interest in earnings of subsidiary of $2.1 million and $1.5 million,
respectively, reflecting the minority common equity interest in the earnings of
Superior net of the minority common equity interest in losses incurred by
Superior Israel for such periods. The Company reflected similar charges for the
prior year three and six month periods totaling $7.1 million and $14.4 million,
respectively.
Equity in earnings of affiliate represents dividend income earned on
Alpine's investment in PolyVision preferred stock and Alpine's proportionate
equity interest in the net earnings of PolyVision for the applicable reporting
periods. Total income recorded from the Company's investment in PolyVision
amounted to $1.2 million and $1.6 million respectively, for the three and six
month periods ended June 30, 2000.
Income before nonrecurring charges for the quarter ended June 30, 2000 was
$3.7 million or $0.24 per diluted share as compared to income from continuing
operations before nonrecurring, unusual and extraordinary charges of
$9.3 million or $0.53 per diluted share for the quarter ended June 30, 1999. For
the six month period ended June 30, 2000, income before nonrecurring and unusual
charges was $5.4 million or $0.35 per diluted share as compared to income from
continuing operations before nonrecurring, unusual and extraordinary charges of
$12.9 million or $0.74 per diluted share for the six months ended June 30, 1999.
The reduction in net income in the current year three and six month periods was
principally due to lower operating income in Superior's Electrical Group, net
losses incurred in Superior's 51% owned subsidiary, Superior Israel, and higher
interest charges related to higher short-term (LIBOR) interest rates.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
For the six months ended June 30, 2000, the Company generated $33.3 million
in cash flows from continuing operating activities. Cash flows from operating
activities included $43.7 million in inventory reductions (13.9% reduction)
resulting from Superior's efforts to lower overall inventory levels and increase
inventory turns, particularly in its building wire operations, offset by a
$48.7 million increase in accounts receivable which reflects strong seasonal
sales and the timing of shipments and billings within the June 30, 2000 quarter.
Cash used for investing activities amounted to $49.2 million and consisted
principally of capital expenditures and pre-arranged long-term loans ("Superior
Israel Customer Loans") made to one of Superior Israel's principal customers.
Cash provided by financing activities amounted to $5.5 million. The major
components were a net increase of borrowings of Superior Israel of
$17.1 million (including $11.8 million related to Superior Israel Customer
Loans), other debt reductions of $9.2 million, and treasury stock repurchases of
$3.4 million.
SUPERIOR TELECOM
Superior finances its operating activities and other capital requirements
(principally capital expenditures) from operating cash flow and funding
availability under Superior TeleCom's $1.15 billion credit agreement (the
"Superior Credit Agreement") and Superior Israel's credit facilities (the
"Israel Credit Agreements"). Total undrawn funding availability under the
Superior Credit Agreement and the Israel Credit Agreements amounted to
$161.6 million and $11.4 million, respectively, at June 30, 2000.
In addition to financing provided by Superior's credit facilities, Superior
has financing availability under a receivable securitization program providing
for up to $160.0 million in short-term financing (subject to the level of
contractually defined eligible receivables) through the issuance of secured
commercial paper. The receivable securitization program expires on November 30,
2000, although it may be extended for successive one-year periods, subject to
agreement. At June 30, 2000, $160.0 million was outstanding under this program.
18
<PAGE>
Superior's principal debt service commitments for the next 12 months amount
to $87.1 million and capital expenditures are expected to approximate
$50.0-$60.0 million. Management anticipates that Superior will generate in
excess of $90 million in cash flows from its operating activities over the next
twelve months subject to fluctuations resulting from operating performance and
working capital changes. Superior believes that operating cash flows plus excess
funds available under Superior's credit facilities will be sufficient to fund
its aforementioned debt service obligations and its estimated capital
expenditure levels.
ALPINE CORPORATE
As of June 30, 2000, Alpine had corporate cash, cash equivalents and
marketable securities (excluding its investments in Superior, PolyVision and
Cookson) of approximately $9.3 million. Alpine also owns approximately
10.5 million common shares (representing 51.7% common share ownership) of
Superior (NYSE:SUT) with a market value on August 4, 2000 of approximately
$91 million and a consolidated carrying value as recorded by the Company (net of
minority interest) of $62.1 million. Additionally, at August 4, 2000, Alpine's
investments in Cookson ordinary shares (FTSE: CKSN.L) and PolyVision common
stock and preferred stock amounted to approximately $115 million and
$35 million, respectively.
Alpine's primary commitments over the next twelve month period include
funding of corporate overhead expenses and interest payments on approximately
$91.9 million in Alpine corporate debt. Total annual funding for Alpine
corporate overhead and interest expense is expected to approximate
$15.0-$16.0 million.
In November 1999, the Company refinanced and expanded its existing corporate
credit facility. The revised credit facility provides for borrowings up to
$100 million, of which $79.0 million was drawn as of June 30, 2000. The Company
has pledged substantially all of its common share and ordinary share ownership
in Superior and Cookson, respectively, as security for this credit facility.
For the next 12 month period, Alpine expects to fund its aforementioned
annual commitments from allowable management fees payable by Superior to Alpine,
cash dividends from Cookson and from interest income, with any shortfall funded
from availability under the aforementioned corporate credit facility or from
existing corporate cash, cash equivalents and marketable securities reserves.
YEAR 2000 UPDATE
The Company did not experience any significant disruptions in its business
operations as a result of the Year 2000 problem. The Year 2000 problem was
defined as the potential system and mechanical failures or miscalculations
resulting from the inability of computer programs to recognize dates after
December 31, 1999. Most computer programs had been written using two digits
(rather than four) to define the applicable year.
In fiscal 1997, the Company established project teams to identify and
resolve Year 2000 problems. The teams' processes included (i) the readiness
assessment of service providers, major vendors and internal operating systems
and applications; (ii) the upgrade or remediation of non-compliant items
identified; and (iii) the testing and implementation of the upgraded or
remediated items.
The Company incurred approximately $6.0 million of costs related to the Year
2000 project. The costs associated with code modification and testing
(approximately $5.0 million) were expensed as incurred. The personal computer
and purchased software upgrades (approximately $1.0 million) were incurred in
the ordinary course of business and capitalized.
The Company does not anticipate any future disruptions in its business
related to the Year 2000 problem.
19
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to market risk primarily relates to interest rates on
long-term debt. There have been no material changes in market risk since
December 31, 1999.
EXCEPT FOR THE HISTORICAL INFORMATION HEREIN, THE MATTERS DISCUSSED IN THIS
FORM 10-Q INCLUDE FORWARD-LOOKING STATEMENTS THAT MAY INVOLVE A NUMBER OF RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY SIGNIFICANTLY BASED ON A NUMBER OF
FACTORS, INCLUDING, BUT NOT LIMITED TO, RISKS IN PRODUCT AND TECHNOLOGY
DEVELOPMENT, MARKET ACCEPTANCE OF NEW PRODUCTS AND CONTINUING PRODUCT DEMAND,
PREDICTION AND TIMING OF CUSTOMER ORDERS, THE IMPACT OF COMPETITIVE PRODUCTS AND
PRICING, CHANGING ECONOMIC CONDITIONS, INCLUDING CHANGES IN SHORT-TERM INTEREST
RATES AND FOREIGN EXCHANGE RATES, AND OTHER RISK FACTORS DETAILED IN THE
COMPANY'S MOST RECENT FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
20
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
<TABLE>
<S> <C>
10.1* Employment Agreement, dated as of October 1, 1999 between
Superior TeleCom Inc. and William F. Evans
10.2* Superior TeleCom Inc. Stock Compensation Plan for
Non-Employee Directors (Amended and Restated Effective as of
May 1, 2000)
27* Financial Data Schedule
</TABLE>
(B) REPORTS ON FORM 8-K
None.
------------------------
* Filed herewith
21
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
<TABLE>
<S> <C> <C>
THE ALPINE GROUP, INC.
Date: August 14, 2000 By: /s/ DAVID S. ALDRIDGE
-----------------------------------------
David S. Aldridge
CHIEF FINANCIAL OFFICER AND TREASURER
(DULY AUTHORIZED OFFICER AND PRINCIPAL
FINANCIAL AND ACCOUNTING OFFICER)
</TABLE>
22
