(Mark One)

For the quarterly period ended June 30, 2000
or

Commission File Number:  0-15938

(860) 610-6000
(Registrant's telephone number)

      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 past 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 July 28, 2000, the registrant had 3,272,579 shares of its $0.001 par value Common Stock outstanding.

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See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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      Debt obligations maturing within one year consisted of the following (in thousands):

      In January 2000, the Company's participation in an interest-free inventory financing program sponsored by Lucent Technologies ended, concurrent with the transfer of the Company's supplier relationship with Lucent to Catalyst Telecom, an authorized Lucent distributor.

      Outstanding borrowings under the Company's revolving credit facility have been reclassified as a current liability as of June 30, 2000 since the agreement matures on June 14, 2001. As of June 30, 2000, the unused portion of the revolving credit facility was approximately $6,965,000, of which approximately $2,025,000 was available under various borrowing formulas. The average and highest amounts borrowed during the three months ended June 30, 2000 were approximately $3,004,000 and $4,379,000, respectively. The average and highest amounts borrowed during the six months ended June 30, 2000 were approximately $3,778,000 and $5,145,000,respectively.

      Long-term debt obligations consisted of the following (in thousands):

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      The gross profit for the three months ended June 30, 2000 was $2,141,000, an increase of $308,000 or 16.8% over the comparable prior year period. The gross profit for the six months ended June 30, 2000 was $4,093,000, an increase of $788,000 or 23.8% over the comparable prior year period. As a percentage of revenue, the gross profit decreased to 19.2% from 25.8% in the prior year three-month period, and decreased to 19.9% from 24.6% in the prior year six-month period. These decreases are primarily attributable to lower profit margins on sales of new equipment, product sales mix, particularly higher sales of equipment to other resellers at margins lower than the Company's end-user sales margins, losses incurred under the Company's contract to repair equipment for Lucent, and charges incurred in the disposal and revaluation of certain inventories.

      SG&A expenses for the three months ended June 30, 2000 were $1,884,000, an increase of $209,000 or 12.5% over the comparable 1999 period. SG&A expenses for the six months ended June 30, 2000 were $3,706,000, an increase of $521,000 or 16.4% over the comparable 1999 period. As a percentage of revenues, SG&A expenses were 16.9% and 18%, respectively, for the three and six months ended June 30, 2000, as compared to 23.5% and 23.7%, respectively, for the three and six months ended June 30, 1999. The increase in SG&A expenses was primarily attributable to higher sales and sales support personnel, and related compensation, as the Company expanded its sales force, Call Center and customer services personnel. The Company also incurred increased costs associated with employee insurance programs, incurred consulting fees and expenses relating to business performance improvement projects, offset by reduced legal, public relations and marketing expenses. Although no assurances can be given, management believes it can continue to hold SG&A expenses (as a percent of revenues) at or below current percentage levels.

      Interest expense for the three and six months ended June 30, 2000 was $84,000 and $199,000, respectively, 37.7% and 55.5% higher, respectively, than the three and six months ended June 30, 1999. The increase in each period was attributable to higher average borrowings under the Company's revolving credit facility, and higher borrowing costs. During the current year six month period, average borrowings under the revolving credit facility were approximately $3.8 million at an average borrowing rate of 9.9%, compared with average borrowings of approximately $2.0 million at an 8% average rate for the same period of 1999. Other income in each current and prior year period consisted primarily of interest earned on invested cash.

      Working capital at June 30, 2000 was $5,892,000, a 42% decrease from $10,150,000 at December 31, 1999. The working capital ratio was 1.7 to 1 at June 30, 2000, compared with 3.2 to 1 at December 31, 1999. Working capital, and the

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working capital ratio were negatively impacted by the reclassification of the Company's $3,035,000 revolving credit loan balance to a current liability as of June 30, 2000, as further discussed below.

      Operating activities provided $2,691,000 during the six months ended June 30, 2000 principally due to reductions in inventories and higher collections of accounts receivable, and from a $1,421,000 increase in accounts payable partially attributable to improved vendor payment terms. Investing activities used $106,000 during the six months ended June 30, 2000 from the purchase of fixed assets. Financing activities used $2,634,000 during the six months ended June 31, 2000, in the reduction of the Company's borrowings under its revolving credit line, repayments of amounts due under its inventory finance agreement, and the repayment of capital lease obligations.

      Outstanding borrowings under the Company's $10 million revolving credit facility have been reclassified as a current liability as of June 30, 2000 since the agreement matures on June 14, 2001. As of June 30, 2000, the unused portion of the revolving credit facility was approximately $6,965,000, of which approximately $2,025,000 was available under various borrowing formulas. The average and highest amounts borrowed during the three months ended June 30, 2000 were approximately $3,004,000 and $4,379,000, respectively. The average and highest amounts borrowed during the six months ended June 30, 2000 were approximately $3,778,000 and $5,145,000,respectively. Borrowings are dependent upon the continuing generation of collateral, subject to the credit limit. The weighted average interest rate on this outstanding debt was 9.9% for the six months ended June 30, 2000. As of June 30, 2000, the Company was in compliance with its loan covenants.

      The Company is currently dependent upon its existing credit agreements and accounts receivable collection experience, to provide cash to satisfy its working capital requirements. Material changes in its credit agreements, or a slowdown in the collection of accounts receivable, could negatively impact the Company. No assurances can be given that the Company will have sufficient cash resources to finance future growth, and it may become necessary to seek additional financing for such purpose. There are currently no material commitments for capital expenditures.

      The Company's prospects are subject to certain uncertainties and risks. The discussions set forth in this Form 10-Q contain certain statements which are not historical facts and are considered forward-looking statements within the meaning of the Federal Securities laws. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, general economic conditions and growth in the telecommunications industry, competitive factors and pricing pressures, changes in product mix, product demand, risk of dependence on third party suppliers, and other risk factors detailed in this report, described from time to time in the Company's other Securities and Exchange Commission filings, or discussed in the Company's press releases. In addition, other written or oral statements that constitute forward-looking statements may be made by or on behalf of the Company. All forward-looking statements included in this document are based upon information available to the Company on the date hereof. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

      Market risks which have the potential to affect the Company's earnings and cash flows result primarily from changes in interest rates. The Company's cash equivalents, which consist of an investment in a money market fund consisting of high quality short term instruments, principally US government and agency issues and commercial paper, are subject to fluctuating interest rates. A 10 percent change in such current interest rates would not have a material effect on the Company's results of operations or cash flow.

      The Company is also exposed to market risk from changes in the interest rate related to its revolving credit facility, which is based upon the lending institution's prime rate. Assuming an average borrowing level of $3.8 million (which amount represented the average amount borrowed under the revolving credit facility during the six months ended June 30, 2000), each 1 percentage point increase in the lending institution's prime rate would result in $38,000 of additional annual interest charges.

      Under its current policies, the Company does not use interest rate derivative instruments to manage exposure to interest rate changes.

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      (1) Election of Directors: All nominees were elected. The results of balloting were as follows:

      (2) Ratification of the Appointment of Deloitte & Touche LLP as Independent Auditors of the Company for the Year Ending December 31, 2000: The proposal was approved with 2,337,154 votes for, 31,964 votes against, 4,398 abstentions and no broker non-votes.

      On March 1, 2000, Lucent announced plans to spin off its Enterprise Networks Group business segment (PBX business), as well as its SYSTIMAX(R) cabling and LAN-based data businesses to shareholders, forming a separate company named "Avaya" that will focus directly and independently on the enterprise networking market. According to Lucent, Avaya will start out as an $8 billion Fortune 200 company with a #1 position in the U.S. call center and voice communications systems markets. This transaction will become effective October 1, 2000. The Company's current Lucent contractual relationships are expected to be continued with Avaya.

      On June 30, 2000, the Company's Registrar and Transfer Agent, American Securities Transfer & Trust, Inc., ("AST") was acquired by Computershare, Inc. Going forward, AST will be operating under the name of Computershare Trust Company, Inc. at the following address: 12039 West Alameda Parkway, Suite Z-2, Lakewood, Colorado 80228. Their telephone number is 303-986-5400.

Item 6.    Exhibits and Reports on Form 8-K:

      (a)    Exhibits:
               27    Financial Data Schedule

      (b)    Reports on Form 8-K:    None.

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      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.