AFC CABLE SYSTEMS INC, 424B1, 1998-05-13

AFC CABLE SYSTEMS INC
424B1, 1998-05-13
DRAWING & INSULATING OF NONFERROUS WIRE

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<PAGE>
PROSPECTUS

1,500,000 SHARES

Pursuant to Rule 424B1

File No. 333-50263

[LOGO]
AFC CABLE SYSTEMS, INC.

COMMON STOCK

Of the 1,500,000 shares of Common Stock offered hereby, 875,000 shares are
being sold by AFC Cable Systems,
Inc. ("AFC" or the "Company") and 625,000 are being sold by certain selling
stockholders (the "Selling
Stockholders"). See "Principal and Selling Stockholders." The Company will not
receive any of the proceeds from the sale
of shares by the Selling Stockholders. The Common Stock is quoted on the Nasdaq
National Market under the symbol
"AFCX." On May 12, 1998, the last reported sale price for the Common Stock, as
reported on the Nasdaq National
Market, was $34.00 per share. See "Price Range of Common Stock."

------------------------

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 7.
---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PROCEEDS TO
UNDERWRITING PROCEEDS TO SELLING
PRICE TO PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share..................... $33.75 $1.77 $31.98 $31.98
Total(3)...................... $50,625,000 $2,655,000 $27,982,500 $19,987,500
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the offering payable by the Company estimated
to be $300,000.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to a maximum of 225,000 additional shares of Common Stock to cover
over-allotments, if any. If such option is exercised in full, the total
"Price to Public," "Underwriting Discount" and "Proceeds to Company" will be
$58,218,750, $3,053,250 and $35,178,000, respectively. See "Underwriting."
------------------------

The shares of Common Stock are offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters and subject
to their right to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in Boston, Massachusetts on
or about May 18, 1998.

TUCKER ANTHONY
INCORPORATED

ROBERT W. BAIRD & CO.
INCORPORATED

JEFFERIES & COMPANY, INC.

THE ROBINSON-HUMPHREY
COMPANY

The date of this Prospectus is May 12, 1998
<PAGE>
[PHOTO: OPTICAL ARMORED CABLE] [PHOTO: FIRE ALARM ARMORED CABLE]

[PHOTO: AFC CABLE SYSTEMS SOLUTIONS]

------------------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED
HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT
COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING."
------------------------

The following trademarks are mentioned in the Prospectus: AC-90, HCF-90, MC
Lite, AC Lite, Home Run Cable, Super Neutral Cable, The Intelligent Floor, The
Intelligent Ceiling, AFC Cable Systems, America Cable Systems and Custom Cuts,
which are registered trademarks of the Company; and Fire Alarm/Control Cable,
which is a trademark of the Company. Other registered trademarks, including UL,
are the property of their respective owners.
<PAGE>
PROSPECTUS SUMMARY

THIS PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS
INCLUDE, AMONG OTHERS, STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE
FINANCIAL PERFORMANCE OF THE COMPANY. PROSPECTIVE INVESTORS ARE CAUTIONED THAT
SUCH STATEMENTS ARE ONLY EXPECTATIONS AND THAT ACTUAL EVENTS OR RESULTS MAY
DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, PROSPECTIVE INVESTORS SHOULD
SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS PROSPECTUS,
INCLUDING THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS," WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED IN SUCH
FORWARD-LOOKING STATEMENTS. THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY
BY, AND SHOULD BE READ IN CONJUNCTION WITH, THE DETAILED INFORMATION AND
FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE
REQUIRES, REFERENCES HEREIN TO THE "COMPANY" OR "AFC" INCLUDE AFC CABLE SYSTEMS,
INC. AND ITS SUBSIDIARIES. UNLESS OTHERWISE INDICATED, THE INFORMATION IN THIS
PROSPECTUS (I) ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION TO
PURCHASE 225,000 SHARES OF COMMON STOCK, (II) REFLECTS THE ISSUANCE OF 50,000
SHARES OF COMMON STOCK PURSUANT TO THE EXERCISE OF STOCK OPTIONS UPON THE
CLOSING OF THIS OFFERING, (III) REFLECTS THE ISSUANCE OF 88,518 SHARES OF COMMON
STOCK PURSUANT TO THE CASHLESS EXERCISE OF A WARRANT PRIOR TO THE OFFERING AND
(IV) GIVES EFFECT TO THE FIVE-FOR-FOUR STOCK SPLIT OF THE COMMON STOCK EFFECTED
ON OCTOBER 20, 1997.

THE COMPANY

AFC Cable Systems, Inc. is a designer, manufacturer and supplier of
electrical, voice and data distribution products used primarily in the
construction and modernization of non-residential buildings. The Company's
products include prewired armored cable, flexible conduit, modular wiring
systems, lighting controls, electrical fittings and specialty coated metals. The
Company believes its prewired armored cable and modular wiring systems offer a
total installed cost advantage over traditional, labor intensive wiring methods
by eliminating on-site installation time and labor costs associated with
bending, connecting and pulling wire through metal pipe. AFC sells its products
principally to leading distributors of electrical products and also actively
targets do-it-yourself ("DIY") retailers and original equipment manufacturers
("OEMs"). The Company's net sales increased from $139.5 million in 1995 to
$220.3 million in 1997, while income from operations increased from $10.5
million in 1995 to $28.3 million over the same period.

The Company's business strategy is to extend its leadership position and
best serve its end-users by (i) promoting its armored cable, flexible wiring
systems and flexible conduit as the preferred alternatives to traditional labor
intensive pipe and wire method installations; (ii) penetrating the higher
margin, higher growth specialty application niche markets through the
development and introduction of new products; (iii) pursuing selective
acquisitions of companies with products complementary to the Company's existing
business in order to leverage its existing distribution network; (iv)
maintaining its position as a low cost producer in its major product lines
without sacrificing its reputation for high quality, innovative products; and
(v) maintaining and expanding relationships with its distributors, DIY retailers
and OEMs.

The Company believes that the total available domestic market for its
prewired armored cable and flexible conduit products was in excess of $1 billion
in 1997. The Company estimates that conventional pipe and wire products
accounted for approximately 65% of this market and products such as those
manufactured by the Company accounted for the remaining approximately 35%. A
significant component of the Company's growth strategy is to convert the pipe
and wire portion of the overall market to the more efficient and cost-effective
solution provided by the Company's products. The Company is the leading
manufacturer of prewired armored cable in the United States, with approximately
45% of the sales in the domestic armored cable market based upon Company
estimates.

In order to penetrate higher margin, specialty application niche markets,
the Company focuses on the creation of proprietary value-added products
utilizing the Company's design and engineering expertise and

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<PAGE>
various technologies. Recent examples of such products include color-coded
cables used for fire alarm systems, health care facilities and optical fiber.
The Company continues to expand its business through the acquisition of
companies with complementary product lines that it believes will benefit
significantly from the Company's existing distribution network. Through its
America Cable Systems Division, the Company continues to enhance its modular
wiring systems, including The Intelligent Floor and The Intelligent Ceiling,
which provide electrical, voice and data distribution throughout an entire
facility.

The Company is not aware of any definitive information about sizes, growth
rates or shares for its product markets or cost savings from use of its
products. The market size, market share and cost savings estimates contained in
this Prospectus have been developed by the Company from internal sources and
reflect the Company's current estimates. No assurance can be given, however,
regarding the accuracy of such estimates.

The Company's principal executive offices are located at 50 Kennedy Plaza,
Suite 1250, Providence, Rhode Island 02903, and its telephone number is (401)
453-2000.

RECENT DEVELOPMENTS

The Company's net sales for the three months ended March 28, 1998 increased
approximately $17.5 million, or 36.6%, to approximately $65.3 million from $47.8
million for the three months ended March 29, 1997. Income from operations
increased approximately $3.1 million, or 56.3%, to approximately $8.6 million
from $5.5 million for the three months ended March 29, 1997. Net income
increased approximately $2.0 million, or 57.1%, to approximately $5.5 million
from $3.5 million for the three months ended March 29, 1997. Basic earnings per
share increased $0.11, or 29.7%, to $0.48 from $0.37 for the three months ended
March 29, 1997. Diluted earnings per share increased $0.10, or 27.8%, to $0.46
from $0.36 for the three months ended March 29, 1997.

During 1997, the Company completed four acquisitions. In January, 1997, the
Company acquired B&B Electronics Manufacturing Company ("B&B"), a manufacturer
and direct marketer of electronic interfaces and connectors that facilitate data
communications, and Area Lighting Research, Inc. ("ALR"), a manufacturer of
lighting controls. In April, 1997, the Company acquired Madison Sale Corporation
("Madison"), a supplier of fittings for the electrical industry. In November,
1997, the Company acquired the Federal Hose Division of FLEXFAB Horizons
International, Inc. ("Federal Hose"), a manufacturer and distributor of flexible
metal, plastic and fabric hoses, ducting and connectors. The acquisition of B&B,
ALR, Madison and Federal Hose are collectively referred to herein as the
"Acquisitions." To date, the Company has paid a total purchase price of
approximately $22.0 million in cash and approximately 152,843 shares of Common
Stock for the Acquisitions. The Company may be required to pay additional
consideration, in either cash or Common Stock, if B&B or Federal Hose meet
certain financial targets in future years. Of the Company's $220.3 million in
net sales for the year ended December 31, 1997, the Acquisitions accounted for
approximately $27.0 million. The Company's diluted earnings per share were $1.66
for the same period. On a pro forma basis, giving effect to the Acquisitions as
if they had occurred on January 1, 1997, the Company's net sales and diluted
earnings per share would have been $235.4 million and $1.70, respectively, for
the year ended December 31, 1997, of which the Acquisitions would have accounted
for approximately $42.1 million of net sales.

The Company has signed a letter of intent for the purchase of all of the
outstanding capital stock of a manufacturer of motion-activated lighting
controls. The total purchase price for this acquisition is expected to consist
of approximately $13.4 million in cash, $1.0 million in Common Stock, and the
assumption of approximately $2.6 million in debt. The Company is also expected
to pay additional consideration, in either cash or Common Stock, if certain
financial targets are met in future years. This acquisition is expected to be
completed during the second quarter of 1998, although there can be no assurance
that the acquisition will be completed during such period, if at all.

4
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company.......... 875,000 shares

Common Stock Offered by the Selling
Stockholders............................... 625,000 shares

Common Stock to be Outstanding after the
Offering................................... 12,475,928 shares(1)

Use of Proceeds.............................. Investment in additional plant and production
equipment to expand manufacturing capacity,
upgrade of existing management information
systems, repayment of certain indebtedness
and general corporate purposes, including
potential acquisitions. See "Use of
Proceeds."

Nasdaq National Market Symbol................ AFCX
</TABLE>

- ------------------------

(1) Based on the number of shares outstanding as of March 31, 1998. Excludes (i)
1,182,845 shares of Common Stock reserved for issuance upon the exercise of
outstanding options at a weighted average exercise price of $18.08 per share
and (ii) 359,587 shares of Common Stock reserved for future grants of Common
Stock or options to purchase Common Stock under the Company's 1993 Stock
Option Plan for Non-Employee Directors, 1997 Equity Incentive Plan and 1998
Equity Incentive Plan.

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997
--------- ---------- ---------- ---------- ----------
STATEMENTS OF INCOME DATA:
Net sales............................................. $ 89,890 $ 114,386 $ 139,483 $ 161,868 $ 220,264
Gross profit.......................................... 23,115 31,889 32,396 43,381 63,785
Income from operations(1)............................. 3,514 10,398 10,470 16,997 28,302
Net income............................................ 1,154 6,193 8,105 11,460 18,239
Basic earnings per common share....................... $ 0.27 $ 0.90 $ 0.92 $ 1.25 $ 1.71
Diluted earnings per common share..................... $ 0.27 $ 0.90 $ 0.90 $ 1.23 $ 1.66
Average shares outstanding and common stock
equivalents (basic)................................. 4,346 6,881 8,851 9,134 10,664
Average shares outstanding and common stock
equivalents (diluted)............................... 4,346 6,909 9,047 9,288 11,024
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
--------------------------
<S> <C> <C>
ACTUAL AS ADJUSTED(2)
---------- --------------
BALANCE SHEET DATA:
Cash and securities................................................................... $ 43,237 $ 65,499
Working capital....................................................................... 88,141 116,403
Total assets.......................................................................... 161,129 183,391
Total debt............................................................................ 10,350 4,350
Shareholders' equity.................................................................. 123,135 151,397
</TABLE>

- ------------------------

(1) For the short tax year from January 1 through December 23, 1993, the date of
the initial public offering of the Company's Common Stock, the Company
elected to be treated for income tax purposes as an S Corporation. The
amount shown includes $3,141,000 for the year ended December 31, 1993 for
owners' compensation and for distributions made to shareholders to pay
income taxes relating to when the Company existed as an S corporation.

(2) Adjusted to reflect (i) the exercise of options to purchase 50,000 shares of
Common Stock by a Selling Stockholder (ii) the issuance of 88,518 shares of
Common Stock upon the cashless exercise of a warrant prior to the offering
and (iii) the sale of the 875,000 shares of Common Stock offered by the
Company hereby at a public offering price of $33.75 per share and the
application of the estimated net proceeds therefrom as described under "Use
of Proceeds." See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

6
<PAGE>
RISK FACTORS

SUBSTANTIAL PRICE COMPETITION, MARGIN MAINTENANCE AND PRICES OF RAW
MATERIALS. Price competition for the Company's core products is significant,
and the Company sells its products in accordance with prevailing market prices.
Copper rod is the principal raw material used in the Company's manufacturing
operations, accounting for approximately 28% of cost of goods sold for the year
ended December 31, 1997. The Company expects that copper will continue to
account for a significant portion of the cost of goods sold in the future.
Historically, the price of copper has fluctuated significantly (i.e. between
$86.85 and $130.10, and $76.60 and $122.00 per 100 pounds in 1996 and 1997,
respectively). The Company's other principal raw materials include steel and
aluminum, which collectively accounted for approximately 30% of cost of goods
sold for the year ended December 31, 1997. Although in the past these raw
materials have not been subject to the same degree of price volatility as
copper, there can be no assurance that significant fluctuations will not occur
in the future. The Company attempts to insulate its products from these price
fluctuations through improved purchasing procedures and appropriate selling
price adjustments. There can be no assurance, however, that the Company will be
able to maintain acceptable gross profit margins on product sales in the future
and, if it is unable to do so, its business, operating results and financial
condition could be materially adversely affected. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Overview." The
Company does not currently engage in metal futures trading or other hedging
activities, but does have a producer supply contract, which currently expires on
December 31, 1998 and under which the Company purchases copper in any given
month at a price equal to the average copper selling prices, as determined by
the New York Commodity Exchange, for the month of shipment plus a premium. In
addition, the Company has an aluminum supply contract which expires on December
31, 1998. The Company may engage in hedging activities in the future as
management deems appropriate.

MANAGEMENT OF GROWTH. The Company has experienced rapid growth,
particularly during the last four years. The continued rapid growth of the
Company could place a significant strain on its management and other resources.
The Company anticipates that continued growth, if any, will require it to
continue to recruit, hire, train and retain a substantial number of new and
highly skilled product development, administrative, information technology,
finance, sales and marketing and support personnel. The Company's ability to
compete effectively and to manage future growth, if any, will depend on its
ability to continue to implement and improve operational, financial and
management information systems on a timely basis and to expand, train, motivate
and manage its work force. Should the Company continue to experience rapid
growth, there can be no assurance that the Company's personnel, systems,
procedures and controls will be adequate to support the Company's operations or
that management will adequately anticipate all demands that growth will place on
the Company. If the Company's management is unable to manage growth effectively,
the quality of the Company's products and its business, operating results and
financial condition could be materially adversely affected. See "--Integration
of Acquisitions" and "Business--Strategy."

INTEGRATION OF ACQUISITIONS. The Company intends to supplement its internal
growth by pursuing selective acquisitions of companies with products
complementary to its existing business. During the year ended December 31, 1997,
the Company acquired four companies and intends to consider future acquisitions
in the industry, some of which may be material to the Company. There can be no
assurance, however, that the Company will be able to identify and acquire
suitable acquisition candidates on reasonable terms, if at all. The Company
competes for acquisition opportunities with other companies that

7
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have significantly greater financial and management resources. Acquisitions,
particularly multiple acquisitions during any short period of time, involve
numerous risks, including difficulties in the assimilation of the operations,
technologies and products of the acquired companies, the diversion of
management's attention from other business concerns, risks of entering markets
in which the Company has no or limited direct prior experience, operating
companies in different geographical locations, and the potential loss of key
employees of the acquired companies. Future acquisitions by the Company could
result in potentially dilutive issuances of equity securities, the incurrence of
debt and contingent liabilities and amortization expenses related to goodwill
and other intangible assets, which could materially adversely affect the
Company's operating results and financial condition. There can be no assurance
that future acquisitions can be successfully integrated or that management will
be successful in managing the combined operations. See "--Management of Growth,"
"Use of Proceeds" and "Business--Strategy."

DEPENDENCE ON NEW PRODUCTS AND PRODUCT IMPROVEMENTS. The commercial
construction industry and the evolution of the modern workstation are
characterized by advances in electrical distribution and communications systems
which require ongoing improvements in the capabilities of wire and cable
products. The Company believes that its future success will depend in part upon
its ability to enhance existing products and to develop and manufacture new
products that meet or anticipate such changes. The failure to introduce new or
enhanced products on a timely and cost competitive basis could have an adverse
impact on the Company's business, operating results or financial condition.

MANUFACTURING CAPACITY. The Company is currently operating at or near
capacity in certain of its manufacturing facilities. Although the Company has
plans to open additional facilities and expand its capacity at others, there can
be no assurance that these additional facilities or expansions will be completed
on time and/or on budget, that the Company will not experience manufacturing
delays or problems, or that adequate equipment and personnel will be available
to operate these new facilities. The additional facilities and equipment will
also require substantial funds. The Company anticipates that the estimated net
proceeds of this offering, borrowings and existing cash will be adequate to fund
its planned expansions. See "Use of Proceeds" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources." If the Company experiences significant delays or problems in
implementing its current plans, such delays or problems could have a material
adverse effect on the Company's business, results of operations or financial
condition.

VOLATILITY OF NEW CONSTRUCTION MARKET. The volatility of the
non-residential new construction market has a direct impact on sales of certain
of the Company's products. Certain regions of the United States have
experienced, and in the future may experience, significant economic recessions
that have reduced, or may reduce, the number of non-residential new construction
projects, which in turn could adversely affect the Company's business, operating
results and financial condition. The Company has historically derived a
substantial portion of its sales from the building modernization market, which
has not been significantly adversely affected by downturns in the
non-residential new construction market. There can be no assurance, however,
that the modernization market will not enter a downturn or that the Company's
sales will not be affected by future downturns in the non-residential new
construction market. The Company's sales have also been impacted from time to
time by unseasonable and excessive weather conditions that delay new
construction. There can be no assurance that such conditions will not have a
material adverse effect on the Company's operating results in the future.

COMPETITION. The Company faces competition from a number of national and
regional competitors, both in the armored cable and pipe and wire industries,
some of which have greater financial, engineering, research and development,
manufacturing and other resources than the Company. The Company's competitors
can be expected to continue to improve the design and performance of their
products and to introduce new products with competitive price and performance
characteristics. Although the Company believes that it has certain technological
and other advantages over its competitors, maintaining and leveraging any such
advantages will require continued investment by the Company in design and
engineering, development, marketing and customer service and support. There can
be no assurance that the Company will have sufficient resources to continue to
make such investments or that the Company will be successful in maintaining and
leveraging any such advantages. The Company also believes that advantages

8
<PAGE>
over its competitors are protected in part by patents and trademarks. There can
be no assurance, however, that the Company's patents will provide adequate
protection against competitors who develop or patent similar technology. The
Company has recently filed suit against one of its competitors for infringement
of the Company's process patented striped armored cable. Although the Company
has received a response to this claim, the litigation is at an early stage and
the outcome cannot presently be determined. There can be no assurance, however,
that the Company's patent will not be successfully challenged and invalidated.
Any invalidation of the Company's patent could have a material adverse effect on
the Company's business, financial condition and results of operations. See
"--Management of Growth," "Business--Competition" and "Business--Patents,
Trademarks and Other Intellectual Property."

RELIANCE ON INDEPENDENT SALES REPRESENTATIVES AND NONEXCLUSIVE
DISTRIBUTORS. The Company sells its products primarily to distributors through
a network of independent sales representatives who generally work on a
commission basis. The Company's top ten sales representatives accounted for
approximately 45% of sales for the year ended December 31, 1997. These
representatives are not under direct control of the Company, are not subject to
minimum purchase requirements and are not contractually obligated to carry the
Company's product lines exclusively or for any period of time. There can be no
assurance that the Company will be able to maintain its existing relationships
with these representatives, although the Company believes that the loss of any
one representative would not have a material adverse impact on the Company's
business. In addition, the distributors which ultimately sell the Company's
products could purchase and distribute products that compete with the Company's
products or cease purchasing the Company's products at any time. There can be no
assurance that the distributors will continue to distribute or recommend the
Company's products or do so successfully.

UPGRADE OF EXISTING COMPUTER INFRASTRUCTURE; YEAR 2000 ISSUE. The Company
is currently preparing to upgrade its existing computer infrastructure and to
replace its accounting, manufacturing and other management information software
in certain divisions with an enterprise resource planning ("ERP") system.
Although the Company expects that the new computer hardware and the ERP software
relating to supply chain management will be installed by the end of 1998 (with
all remaining applications being installed by the end of 1999), there can be no
assurance that the Company will be able to achieve this installation on time
and/or on budget. Further, the Company has never undertaken such a significant
modification to its information management systems and, accordingly, there can
be no assurance that the Company will not experience significant delays and/or
compatibility problems in the installation and testing of the ERP system. The
proposed new ERP system will also require extensive training across all
departments. Any delays or significant problems with respect to installation or
compatibility of the ERP system with the Company's existing computer
infrastructure or the failure to train the Company's personnel on a timely or
adequate basis could materially adversely affect the Company's business,
financial condition and results of operations.

Although the Company believes that Year 2000 operability issues will be
resolved by the proposed upgrading of its existing computer infrastructure and
the transition to the ERP system, there can be no assurance that such efforts
will be successful in resolving all or any of Year 2000 operability issues.
Further, certain divisions of the Company will not have the ERP system
installed. Instead, those divisions are addressing the Year 2000 operability
issue with other software products and techniques to convert their information
systems. There can be no assurance, however, that these divisions will
adequately address the Year 2000 operability issue or that the proposed measures
will properly interface with the ERP system, if at all. The failure of these
divisions to adequately address the Year 2000 operability issue or the failure
to implement changes to their information systems that are compatible with the
proposed ERP system could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company could also
be adversely impacted by the Year 2000 operability issue if suppliers, customers
and other businesses do not address the issue successfully.

VOLATILITY OF STOCK PRICE. The market price of the Common Stock is subject
to significant fluctuations in response to variations in quarterly operating
results and other factors, such as announcements of acquisitions of other
businesses by the Company, technological innovations or new products by the
Company or its competitors, changes in government regulations and codes relating
to use of the

9
<PAGE>
Company's products, developments in patent or other proprietary rights,
developments in the Company's relationships with its customers, partners and
suppliers, seasonality and general conditions in the market served by the
Company or by its customers, and other events or factors. In addition, the stock
market has in recent years experienced significant price fluctuations. These
fluctuations often have been unrelated to the operating performance of the
specific companies whose stock is traded. These fluctuations, as well as general
economic, market and political conditions, may adversely affect the market price
of the Common Stock. See "Price Range of Common Stock."

DEPENDENCE ON KEY MANAGEMENT PERSONNEL. The Company's long-term success and
its growth strategy depend on its senior management, particularly Ralph R.
Papitto, the Company's Chairman and Chief Executive Officer, Robert R. Wheeler,
the Company's President and Chief Operating Officer, and Raymond H. Keller, the
Company's Chief Financial Officer. The loss of service of one or more of the
Company's key senior management personnel could have an adverse effect on the
Company's business, financial condition and results of operations. See
"Management--Executive Officers and Directors."

CONTROL BY PRINCIPAL STOCKHOLDER. After this offering, Ralph R. Papitto,
the Chairman of the Board and Chief Executive Officer of the Company, will own
approximately 15.4% of the Company's outstanding Common Stock. As a result of
his ownership, Mr. Papitto will be in a position to exert significant influence
over actions of the Company which require stockholder approval and generally
direct the affairs of the Company, including potential acquisitions, sales and
changes in control of the Company. See "Principal and Selling Stockholders" and
"Description of Capital Stock."

ANTITAKEOVER PROVISIONS. Certain provisions of the Company's Restated
Certificate of Incorporation, as amended, the By-Laws and the Delaware General
Corporation Law (the "DGCL") could discourage potential acquisition proposals
and could delay or prevent a change in control of the Company. Such provisions,
which include supermajority voting requirements for specified business
combinations, a staggered Board of Directors, and the right of the Board of
Directors, without further stockholder approval, to issue preferred stock (the
"Preferred Stock") upon such terms and conditions, and having such rights,
privileges and preferences as the Board of Directors may determine, may have the
effect of deferring hostile takeovers or delaying or preventing changes in
control or management of the Company. The rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of any holders
of Preferred Stock that may be issued in the future. The Company has no present
plans to issue any Preferred Stock. See "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE. Sales of a substantial number of shares of
Common Stock in the public market following the offering (pursuant to Rule 144
under the Securities Act of 1933, as amended, or otherwise), as well as the
issuance of shares upon exercise of employee stock options, could adversely
affect the prevailing market price of the Common Stock and impair the Company's
ability to raise additional capital through the sale of equity securities. Based
on the number of shares outstanding as of March 31, 1998, approximately
1,984,461 shares held by the Company's executive officers, directors and certain
employees after completion of this offering will be eligible for sale under Rule
144 (although all of these shares are subject to lock-up agreements (the
"Lock-up Agreements") with the representatives of the Underwriters (the
"Representatives") that prohibit their transfer for a period of 180 days
following the date of this Prospectus without the prior written approval of the
Representatives). As of March 31, 1998, an additional 1,182,845 shares were
subject to outstanding options, of which 783,750 will be subject to the Lock-up
Agreements. See "Shares Eligible for Future Sale."

DIVIDEND POLICY. Since its initial public offering, the Company has not
declared or paid a cash dividend on its Common Stock and does not intend to do
so in the foreseeable future. The Company's current policy is to retain its
earnings, if any, to finance expansion and product development. Payment of
dividends in the future will depend on the earnings and financial condition of
the Company and such other factors as the Company's Board of Directors may
consider or deem appropriate at the time. See "Dividend Policy."

10
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 875,000 shares of
Common Stock offered by the Company hereby at a public offering price of $33.75
per share are estimated to be $27.7 million ($34.9 million if the Underwriters'
over-allotment option is exercised in full) after deducting estimated offering
expenses and underwriting discounts payable by the Company. The Company will not
receive any proceeds from the sale of Common Stock by the Selling Stockholders.

The Company intends to use the net proceeds to fund the approximate $16.0
million cash portion of the purchase price for the potential acquisition of a
manufacturer of motion-activated lighting controls and to repay certain
indebtedness to be assumed in connection therewith. See "Summary--Recent
Developments." The Company will use the remaining proceeds and its existing cash
balance (i) to fund approximately $17.0 million in capital expenditures over the
next two years, mainly to expand manufacturing capacity and upgrade its
management information systems; (ii) to repay approximately $6.0 million of
indebtedness outstanding under its revolving credit facility with Fleet National
Bank, which credit facility terminates on March 31, 1999 and currently bears
interest at an average rate of 6.28%; and (iii) for working capital and general
corporate purposes, including potential acquisitions. Although the Company
currently has no commitments or understandings with respect to significant
acquisitions other than that discussed above and in "Summary--Recent
Developments," the Company regularly identifies and evaluates potential
acquisitions of companies that are complementary to its existing business.
Pending such uses, the net proceeds will be invested in government securities
and other short-term, investment-grade, interest-bearing instruments.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "AFCX." The following table sets forth for the periods indicated the high
and low closing sale prices for the Common Stock as reported on the Nasdaq
National Market for the quarterly periods presented below, which periods
correspond to the Company's quarterly fiscal periods for financial reporting
purposes. The share prices in the following table reflect a five-for-four stock
split of the Company's Common Stock which took effect on October 20, 1997.

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
1996
First Quarter................................................................................ $ 11.80 $ 9.50
Second Quarter............................................................................... 14.00 10.60
Third Quarter................................................................................ 14.80 12.40
Fourth Quarter............................................................................... 19.10 13.60
1997
First Quarter................................................................................ $ 21.40 $ 16.00
Second Quarter............................................................................... 22.40 15.50
Third Quarter................................................................................ 28.40 21.10
Fourth Quarter............................................................................... 31.88 22.50
1998
First Quarter................................................................................ $ 40.00 $ 27.75
Second Quarter (through May 12, 1998)........................................................ 40.13 33.88
</TABLE>

On May 12, 1998, the last sale price of the Common Stock as reported on the
Nasdaq National Market was $34.00 per share. As of May 12, 1998, there were
approximately 103 holders of record of the Common Stock.

DIVIDEND POLICY

Since its initial public offering in 1993, the Company has not declared or
paid a cash dividend on its Common Stock and does not intend to do so in the
foreseeable future. The Company's current policy is to retain its earnings, if
any, to finance expansion and product development.

11
<PAGE>
CAPITALIZATION
(IN THOUSANDS)

The following table sets forth the cash and securities, short-term
indebtedness and capitalization of the Company at December 31, 1997 (i) on an
actual basis and (ii) as adjusted to reflect the exercise of options to purchase
50,000 shares of Common Stock by a Selling Stockholder, the issuance of 88,518
shares of Common Stock upon the cashless exercise of a warrant prior to the
offering, the issuance and sale of 875,000 shares of Common Stock of the Company
in this offering at a public offering price of $33.75 per share and the
application of the net proceeds therefrom as described under "Use of Proceeds."
The following financial information is qualified in its entirety by, and should
be read in conjunction with, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and detailed information and financial
statements, including the notes thereto, appearing elsewhere or incorporated by
reference in this Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------
<S> <C> <C>
ACTUAL AS ADJUSTED
---------- -----------
Cash and securities...................................................................... $ 43,237 $ 65,499
---------- -----------
---------- -----------
Short-term debt:
Bank line of credit.................................................................... $ 6,230 $ 230
Current portion of long-term debt...................................................... 227 227
---------- -----------
Total short-term debt................................................................ $ 6,457 $ 457
---------- -----------
---------- -----------
Long-term debt, net of current portion................................................... $ 3,893 $ 3,893
---------- -----------

Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued
Common stock, $.01 par value, 15,000,000 shares authorized, 11,397,854 issued and
outstanding(1); 12,411,372 shares issued and outstanding, as adjusted................ 114 124
Additional paid-in capital............................................................. 79,110 107,362
Other.................................................................................. 1,021 1,021
Treasury stock, 6,411 shares at cost................................................... (92) (92)
Retained earnings...................................................................... 42,982 42,982
---------- -----------
Total shareholders' equity........................................................... 123,135 151,397
---------- -----------
Total capitalization............................................................... $ 127,028 $ 155,290
---------- -----------
---------- -----------
</TABLE>

- ------------------------

(1) Excludes 1,030,579 shares of Common Stock reserved for issuance upon the
exercise of outstanding options and warrants at a weighted average exercise
price of $13.27 per share.

12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected financial information is qualified in its entirety,
and should be read in conjunction with, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the other financial
information and the consolidated financial statements, including the notes
thereto, appearing elsewhere or incorporated by reference in this Prospectus.
The following selected financial data is derived from the Company's consolidated
financial statements which have been audited by Ernst & Young LLP, independent
auditors.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
<S> <C> <C> <C>
1995 1996 1997
---------- ---------- ----------
INCOME STATEMENT DATA:
Net sales.................................................................. $ 139,483 $ 161,868 $ 220,264
Cost of sales.............................................................. 107,087 118,487 156,479
---------- ---------- ----------
Gross profit............................................................... 32,396 43,381 63,785
Selling, general and administrative expenses............................... 21,926 26,384 35,483
---------- ---------- ----------
Income from operations..................................................... 10,470 16,997 28,302
Other income, net.......................................................... 3,040 2,291 1,949
Interest expense........................................................... 614 728 620
---------- ---------- ----------
Income before income taxes................................................. 12,896 18,560 29,631
Income taxes............................................................... 4,791 7,100 11,392
---------- ---------- ----------
Net income................................................................. $ 8,105 $ 11,460 $ 18,239
---------- ---------- ----------
---------- ---------- ----------
Basic earnings per common share............................................ $ 0.92 $ 1.25 $ 1.71
---------- ---------- ----------
---------- ---------- ----------
Diluted earnings per common share.......................................... $ 0.90 $ 1.23 $ 1.66
---------- ---------- ----------
---------- ---------- ----------
Basic average shares....................................................... 8,851 9,134 10,664
Dilutive average shares.................................................... 9,047 9,288 11,024
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- --------- ----------
BALANCE SHEET DATA:
Cash and securities........................................................... $ 27,614 $ 31,488 $ 43,237
Working capital............................................................... 48,099 58,959 88,141
Total assets.................................................................. 84,784 97,923 161,129
Long term debt, net of current portion........................................ 0 3,300 3,893
Total debt.................................................................... 6,925 5,570 10,350
Shareholders' equity.......................................................... 61,311 72,990 123,135
</TABLE>

13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Net sales of the Company's products are influenced by the level of
non-residential construction and building modernization and rehabilitation. Over
the past three years, the Company's annual net sales and total product footage
sold have increased faster than the growth in the new construction market. The
Company believes that the increase in net sales is attributable to greater
market acceptance of armored cable, flexible wiring systems, flexible conduit
and the Company's specialty cable products compared to pipe and wire
installation methods, the positive effect of acquisitions, higher expenditures
in the building modernization market and increased sales to DIY retailers and
OEM customers.

AFC's product mix significantly affects gross profit. Historically, the
Company supplied primarily traditional armored cable and flexible conduit. The
Company, however, has expanded its product offerings to increase sales of
specialty application cables and modular wiring systems which typically command
higher margins. The Company also has experienced a shift in sales from lower
margin AC-90 cable to higher margin Metal Clad (MC) Cable. This favorable shift
has been partially offset by increased demand in recent years for aluminum
armored cables, certain of which have relatively lower margins than steel
armored cables. Overall margins on aluminum armored cables, however, have
increased with the shift to the aluminum version of the MC Cable and as the
Company has improved the efficiency of its aluminum armoring manufacturing
processes.

Raw materials constitute a significant portion of cost of goods sold, with
copper rod, steel and aluminum accounting for approximately 58% of cost of goods
sold for the year ended December 31, 1997. The Company has attempted to minimize
its exposure to fluctuating prices of raw materials by implementing improved
purchasing practices, including extended supply contracts and multiple sourcing,
reengineering its products to optimize metal content within Underwriters
Laboratories' standards, and reacting more quickly with appropriate selling
price adjustments for related products. The Company does not currently engage in
any hedging activities.

The Company's products historically have been segregated into two
categories: (i) the Wire and Cable Division, which manufactures core armored
cable, flexible conduit and specialty cables, electrical fittings and specialty
coated metals and (ii) the America Cable Systems Division, which manufactures
flexible and premise wiring systems and related products. The Company recently
added to the Wire and Cable Division the flexible metal, fabric and plastic
hoses, ducting and connectors manufactured by Federal Hose and the electrical
fittings sold by Madison. Further, the electronic interfaces and connectors
manufactured by B&B

14
<PAGE>
and the lighting controls and electrical devices manufactured by ALR were added
to the America Cable Systems Division.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentages
of the Company's net sales represented by certain income and expense items in
the Company's consolidated statements of income.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- --------- ---------
Net sales......................................................................... 100.0% 100.0% 100.0%
Cost of goods sold................................................................ 76.8 73.2 71.0
--------- --------- ---------
Gross profit...................................................................... 23.2 26.8 29.0
Selling, general and administrative expenses...................................... 15.7 16.3 16.2
--------- --------- ---------
Income from operations............................................................ 7.5 10.5 12.8
Other income, net................................................................. 2.2 1.4 0.9
Interest expense.................................................................. 0.4 0.4 0.3
--------- --------- ---------
Income before income taxes........................................................ 9.2 11.5 13.5
Income taxes...................................................................... 3.4 4.4 5.2
--------- --------- ---------
Net income........................................................................ 5.8 7.1 8.3
--------- --------- ---------
--------- --------- ---------
</TABLE>

RECENT OPERATING RESULTS

The Company's net sales for the three months ended March 28, 1998 increased
approximately $17.5 million, or 36.6%, to approximately $65.3 million from $47.8
million for the three months ended March 29, 1997. Income from operations
increased approximately $3.1 million, or 56.3%, to approximately $8.6 million
from $5.5 million for the three months ended March 29, 1997. Net income
increased approximately $2.0 million, or 57.1%, to approximately $5.5 million
from $3.5 million for the three months ended March 29, 1997. Basic earnings per
share increased $0.11, or 29.7%, to $0.48 from $0.37 for the three months ended
March 29, 1997. Diluted earnings per share increased $0.10 , or 27.8% , to $0.46
from $0.36 for the three months ended March 29, 1997.

YEAR ENDED DECEMBER 31, 1997 VERSUS YEAR ENDED DECEMBER 31, 1996

NET SALES. Net sales for the year ended December 31, 1997 increased $58.4
million, or 36.1%, to $220.3 million from $161.9 million for the year ended
December 31, 1996. Net sales for the Wire and Cable Division increased by $36.7
million, or 25.4%, to $181.0 million for the year ended December 31, 1997 from
$144.3 million for the year ended December 31, 1996. The increase was
attributable primarily to higher sales of traditional armored cable and flexible
conduit products, higher margin speciality application cables, fittings and
connectors, and specialty coated metals products. Also contributing to this
increase were the sales attributable to Madison and Federal Hose, which were
acquired in April and November of 1997, respectively. Net sales for the America
Cable Systems Division increased by $21.7 million, or 129.9%, to $38.4 million
for the year ended December 31, 1997 from $16.7 million for the year ended
December 31, 1996. This increase is attributable to higher sales of modular
wiring systems as well as sales by ALR and B&B, both of which were acquired in
January, 1997.

GROSS PROFIT. Gross profit for the year ended December 31, 1997 increased
$20.4 million, or 47.0%, to $63.8 million from $43.4 million for the year ended
December 31, 1996. Gross margin increased to 29.0% for the year ended December
31, 1997 from 26.8% for the year ended December 31, 1996. This increase is
attributable to (i) improved operating efficiencies, (ii) more efficient
material utilization resulting from improved manufacturing processes, (iii)
decreased cost of raw materials through improved purchasing

15
<PAGE>
practices such as extended supply contracts and use of multiple suppliers, (iv)
increased sales of the Company's higher margin speciality application cables,
and (v) higher margins on certain of the products sold by the companies acquired
in 1997.

INCOME FROM OPERATIONS. Income from operations for the year ended December
31, 1997 increased $11.3 million, or 66.5%, to $28.3 million from $17.0 million
for the year ended December 31, 1996. Income from operations as a percentage of
net sales increased to 12.8% for the year ended December 31, 1997 from 10.5% for
the year ended December 31, 1996. This increase resulted from improved gross
margin, but was partially offset by an increase in compensation expense and
increases in freight costs and sales agent commissions, which generally rise in
proportion with net sales.

NET INCOME. Net income for the year ended December 31, 1997 increased $6.7
million, or 59.2%, to $18.2 million from $11.5 million for the year ended
December 31, 1996. Net income as a percentage of net sales increased to 8.3% for
the year ended December 31, 1997 from 7.1% for the year ended December 31, 1996.
This increase was primarily attributable to increased income from operations.

YEAR ENDED DECEMBER 31, 1996 VERSUS YEAR ENDED DECEMBER 31, 1995

NET SALES. Net sales for the year ended December 31, 1996 increased $22.4
million, or 16.1%, to $161.9 million from $139.5 million for the year ended
December 31, 1995. Net sales for the Wire and Cable Division increased by $19.9
million, or 16.0%, to $144.3 million for the year ended December 31, 1996 from
$124.4 million for the year ended December 31, 1995. Contributing to the
increase were additional sales of the Company's traditional armored cable and
flexible conduit products as well as increased sales of the Company's higher
margin specialty application cables. Also contributing to this increase were
higher sales of fittings and connectors and specialty coated metal products
introduced by the Company in early 1995. Net sales for the America Cable Systems
Division increased by $2.5 million, or 17.6%, to $16.7 million for the year
ended December 31, 1996 from $14.2 million for the year ended December 31, 1995.
This increase is attributable to improved demand for modular wiring systems,
including The Intelligent Floor and The Intelligent Ceiling products.

GROSS PROFIT. Gross profit for the year ended December 31, 1996 increased
$11.0 million, or 33.9%, to $43.4 million from $32.4 million for the year ended
December 31, 1995. Gross margin increased to 26.8% for the year ended December
31, 1996 from 23.2% for the year ended December 31, 1995. This increase is
attributable to (i) decreased cost of raw materials through more efficient
purchasing, lower market prices of commodities and improved manufacturing
processes resulting in better yields on materials and (ii) increased sales of
higher margin specialty application products.

INCOME FROM OPERATIONS. Income from operations for the year ended December
31, 1996 increased $6.5 million, or 62.3%, to $17.0 million from $10.5 million
for the year ended December 31, 1995. Income from operations as a percentage of
net sales increased to 10.5% for the year ended December 31, 1996 from 7.5% for
the year ended December 31, 1995. This increase resulted from improved gross
margin, partially offset by an increase in selling, general and administrative
expenses as a percent of net sales in 1996 compared to 1995. The increase in
selling, general and administrative expenses is attributable to increases in
freight costs, sales agent commissions, compensation expense and fees for
professional services.

NET INCOME. Net income for the year ended December 31, 1996 increased $3.4
million, or 41.4%, to $11.5 million from $8.1 million for the year ended
December 31, 1995. Net income as a percentage of net sales increased to 7.1% for
the year ended December 31, 1996 from 5.8% for the year ended December 31, 1995.
This increase was primarily due to increased income from operations, partially
offset by (i) a slight decline in other income, which consisted primarily of
income on investment securities, and (ii) a higher effective tax rate of 38.3%
for the year ended December 31, 1996 compared to 37.2% for the year ended
December 31, 1995 which was due to a higher marginal tax rate in 1996.

16
<PAGE>
SELECTED QUARTERLY STATEMENTS OF OPERATIONS DATA

The following table sets forth certain unaudited quarterly results of
operations data of the Company for each of the four quarters for the years ended
December 31, 1996 and 1997. The Company believes that this information has been
prepared on the same basis as the audited consolidated financial statements and
that all necessary adjustments, consisting only of the normal recurring
adjustments, have been included to present fairly the selected quarterly
information when read in conjunction with the audited consolidated financial
statements and the notes thereto included elsewhere or incorporated by reference
in this Prospectus. The operating results for any quarter are not necessarily
indicative of results for any future period.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MAR. 30, JUNE 29, SEPT. 28, DEC. 31, MAR. 29, JUNE 28, SEPT. 27, DEC. 31,
1996 1996 1996 1996 1997 1997 1997 1997
--------- --------- --------- --------- --------- --------- --------- ---------

<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales...................... $ 33,885 $ 42,218 $ 41,559 $ 44,206 $ 47,787 $ 54,210 $ 56,704 $ 61,563
Gross profit................... 7,984 10,953 11,845 12,599 13,308 15,564 16,552 18,361
Income from operations......... 2,047 4,283 5,259 5,408 5,505 6,820 7,681 8,296
Net income..................... 1,636 2,904 3,350 3,570 3,460 4,387 4,978 5,414
Basic earnings per share....... $ 0.18 $ 0.32 $ 0.37 $ 0.39 $ 0.37 $ 0.41 $ 0.44 $ 0.48
Diluted earnings per share..... $ 0.18 $ 0.31 $ 0.36 $ 0.38 $ 0.36 $ 0.40 $ 0.43 $ 0.46
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

The Company's short-term liquidity needs have generally consisted of
operating capital necessary to finance inventories and receivables. Long-term
liquidity needs generally relate to capital expenditures necessary to expand the
production capacity of its manufacturing operations and to supplement its growth
through acquisitions. The Company has satisfied its short- and long-term
liquidity needs with cash generated from operations and proceeds from public
offerings of its Common Stock in 1995 and 1997, supplemented by available
borrowings under its revolving line of credit. The Company currently expects
that it will meet its ongoing working capital needs for the next twenty-four
months primarily with existing cash, cash generated from operations and the net
proceeds from this offering.

Cash generated from operations totaled $5.1 million and $11.5 million for
the years ended December 31, 1997 and 1996, respectively, and was attributable
primarily to increased profitability, although cash generated for the year ended
December 31, 1997 was partially offset by an increase in inventories and
accounts receivable. Cash used in operations was $1.3 million for the year ended
December 31, 1995, again primarily due to an increase in inventories and
accounts receivable. Working capital on December 31, 1997 was $88.1 million and
the ratio of current assets to current liabilities was 3.93 to 1.00. Working
capital on December 31, 1996 was $59.0 million and the ratio of current assets
to current liabilities was 4.08 to 1.00. The Company's average inventory of
$32.9 million for the year ended December 31, 1997 (including $8.0 million of
inventories of companies acquired during such period) represented an increase of
$12.9 million over the average inventory of $20.0 million for the year ended
December 31, 1996.

Accounts receivable at December 31, 1997 were $8.2 million higher than the
balance at December 31, 1996 due primarily to increased sales and to $6.4
million in accounts receivable of companies acquired during the year ended
December 31, 1997. For the year ended December 31, 1997, average day sales
outstanding were 55 compared to 56 for the year ended December 31, 1996. At
December 31, 1997, accounts receivable over 60 days represented 3.8% of accounts
receivable.

Capital expenditures for the year ended December 31, 1997 of $7.7 million
were mainly for new or replacement production equipment to increase
manufacturing capacity. Capital expenditures amounted to $7.0 million and $2.3
million for the years ended December 31, 1996 and 1995, respectively. For the
years ended December 31, 1997, 1996 and 1995, the Company leased certain
manufacturing equipment valued at

17
<PAGE>
$0.1 million, $1.7 million and $2.0 million, respectively. Capital expenditures
for the year ending December 31, 1998 are expected to be approximately $11.0
million, primarily for the expansion of manufacturing capacity and the upgrade
of management information systems.

At December 31, 1997, bank indebtedness under the Company's unsecured
revolving line of credit was $6.2 million. This revolving line of credit
terminates on March 31, 1999 and provides for direct borrowings of up to $25.0
million, including letter of credit borrowings up to $3.0 million. Up to $10.0
million of the line of credit may be used without the lender's prior consent for
business acquisitions. At December 31, 1997, letters of credit totaling
approximately $0.8 million were outstanding under the line of credit. Borrowings
under the line of credit averaged $3.8 million for the year ended December 31,
1997. The Company expects to pay the outstanding balance of the line of credit
with a portion of the net proceeds of the offering. See "Use of Proceeds."

Borrowings under the revolving line of credit are available at interest
rates equal to either the lender's base rate or the Eurodollar rate plus 0.5% to
1.25% for a fixed period of one, two, three, six or twelve months. At December
31, 1997, the weighted average cost of borrowings under the line of credit was
8.5%. The line of credit contains certain restrictive covenants, including the
requirement that the Company maintain minimum levels of tangible capital funds
and meet other specified ratio requirements.

During 1996, the Company was loaned the proceeds from the issuance of $3.57
million in IRBs by the Massachusetts Industrial Finance Agency for the purpose
of acquiring and refurbishing a 99,000 square-foot manufacturing facility in New
Bedford, Massachusetts, which secures the IRBs. The IRBs mature on July 24, 2016
and carry an average interest rate that adjusts on a weekly basis. The IRBs
carried an average interest rate of approximately 3.75% and 3.5% for the years
ended December 31, 1997 and 1996, respectively. In addition, an annual fee of
1.0% of the amount of an unsecured stand-by letter of credit is payable to the
bank holding the letter of credit and also acting as trustee under the terms of
the IRB issuance. The Company has the right to convert from the variable
interest rate to a fixed rate established at the time of conversion. The bonds
are payable in nineteen annual installments of $180,000 with a final payment of
$150,000 due at maturity, all funded through monthly payments of $15,000 to the
trustee over the twelve months preceding the installment due dates.

During 1997, the Company acquired four companies for a total cash purchase
price of approximately $22.0 million (subject to additional consideration if
certain financial targets are met) and approximately 152,843 shares of Common
Stock. Although the Company currently has no commitments with respect to
significant acquisitions other than that described under "Summary--Recent
Developments," the Company regularly evaluates potential acquisitions of
companies that are complementary to its existing business.

INFLATION AND FOREIGN EXCHANGE FLUCTUATION

The Company believes that inflation has not had a material effect on its
business, operating results or financial condition during the three-year period
ended December 31, 1997. While the Company does not believe that its business is
highly sensitive to inflation, there can be no assurance that future increases
in the rate of inflation would not have a material adverse effect on the
Company's operations.

The Company is currently not exposed to foreign exchange risk because
foreign sales are denominated in U.S. dollars to U.S.-based trading companies.
The Company may seek to manage any such future risk by entering into foreign
exchange contracts as management deems appropriate.

18
<PAGE>
BUSINESS

OVERVIEW

AFC is a designer, manufacturer and supplier of electrical, voice and data
distribution products used primarily in the construction and modernization of
non-residential buildings. The Company's products include prewired armored
cable, flexible conduit, modular wiring systems, lighting controls, electrical
fittings and specialty coated metals. The Company believes its prewired armored
cable and modular wiring systems offer a total installed cost advantage over
traditional, labor intensive wiring methods by eliminating on-site installation
time and labor costs associated with bending, connecting and pulling wire
through metal pipe. The Company believes that the total available domestic
market for its prewired armored cable and flexible conduit products was in
excess of $1 billion in 1997. Conventional pipe and wire products accounted for
approximately 65% of this market and products such as those manufactured by the
Company accounted for the remaining approximately 35%. A significant component
of the Company's growth strategy is to convert the pipe and wire portion of the
overall market to the more efficient and cost effective solution provided by the
Company's products. The Company is the leading manufacturer of prewired armored
cable in the United States, with approximately 45% of the sales in the domestic
armored cable market based upon Company estimates. In addition to traditional
armored cable products, the Company focuses on the creation of proprietary
value-added products utilizing the Company's design and engineering expertise
and various technologies. These products include color-coded cables used for
fire alarm systems and health care facilities, as well as prewired modular
wiring systems that are designed and assembled for custom installations.

The Company's products can be separated into two broad categories: (i)
armored cable, flexible conduit, specialty cables, electrical fittings,
speciality coated metals and flexible metal fabric and plastic hoses, ducts and
connectors, all manufactured by the Wire and Cable Division and (ii) flexible
and premise wiring systems and related products and lighting controls
manufactured by the America Cable Systems Division. The divisions are vertically
integrated in that many of the products manufactured in the America Cable
Systems Division utilize components, including cable remnants, produced in the
Wire and Cable Division.

Net sales of the Company's major products (excluding the Company's trucking
operations) for the year ended December 31, 1997 were as follows:

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
Armored Cable $119.2 million
Flexible Conduit $23.6 million
Specialty Cable Products $20.2 million
Modular Wiring Systems $19.6 million
Custom Cuts, Fixture Whips and
Others $3.9 million
Lighting Products $14.9 million
Other Cable Products $18.0 million
Wire and Cable Division
America Cable Systems Division
</TABLE>

19
<PAGE>
The Company believes that it is a leading national supplier of many of the
products that it manufactures. The following chart illustrates the Company's
gross sales by region for the year ended December 31, 1997:

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
South Atlantic 25%
Mountain
Pacific 13%
Mid Atlantic 24%
Mid West 14%
New England 8%
South Central 13%
International 3%
</TABLE>

INDUSTRY BACKGROUND

The manufacture and installation of electrical, voice and data distribution
products are subject to various building codes as well as safety and performance
standards set by industry groups and independent testing laboratories. The
National Electric Code ("NEC"), administered by the National Fire Protection
Association ("NFPA"), sets the minimum safety standards to which electrical
products are manufactured and installed in the United States. NEC standards are
enforced and supplemented by the appropriate state, county and municipal
authorities having jurisdiction. The federal government also sets specifications
(the "Federal Specifications") detailing the requirements for all electrical
products to be installed in federal buildings. In addition to building codes,
Underwriters Laboratories ("UL"), a nonprofit, independent organization,
operates a listing service for electrical and electronic materials and
equipment. UL listing is required by national and most electrical codes in the
United States. UL conformity assessment includes testing, evaluation and
certification, including a review of the manufacturer's facilities. The Canadian
Standard Associations ("CSA") and the British Approval Service for Cables
("BASEC") are the equivalent to UL in their respective countries. Most European
community countries generally rely on UL or BASEC approval and certification for
electrical products.

The NEC precludes the use of non-metallic sheathed cable in buildings of
three stories or higher. The conventional method of wiring a facility involves
the use of steel or aluminum pipe which is cut, bent and connected on site by
the electrical contractor. Once installed, wire is manually fed through the
pipe. An alternative to this pipe and wire method is prewired armored cable,
such as that manufactured by the Company. Although the use of prewired armored
cable provides several benefits over the pipe and wire method, the most
significant of which is the substantial reduction of installation labor costs,
the use of certain prewired armored cable products is not currently permitted by
local building codes in a limited number of municipalities, including Chicago,
San Antonio and Toledo.

STRATEGY

The Company's business strategy is to extend its leadership position and
best serve its end-users by (i) promoting its armored cable, flexible wiring
systems and flexible conduit as the preferred alternative to traditional labor
intensive pipe and wire method installations; (ii) penetrating the higher
margin, higher growth specialty application niche markets through the
development and introduction of new products; (iii) pursuing selective
acquisitions of companies with products complementary to the Company's existing
business; (iv) maintaining its position as a low cost producer in its major
product lines without sacrificing its reputation for high quality, innovative
products; and (v) maintaining and expanding relationships with its distributors,
DIY retailers and OEMs.

CONTINUED PRODUCT PROMOTION. The Company is committed to the promotion of
armored cable, flexible wiring systems and flexible conduit as the preferred
alternative to traditional labor intensive pipe

20
<PAGE>
and wire installation methods. The Company is continually educating electrical
contractors and inspectors, construction consultants, architects, vocational
students and other end users about the technological advantages and cost savings
of armored cable and flexible wiring systems in the electrical transmission and
developing communications markets. The Company estimates the installed cost
savings of armored cable systems over pipe and wire installations can range from
30% to 50% depending on product type and contractor labor rates. The Company
also has an in-house telemarketing department that researches pending
construction projects in an effort to promote AFC's products and, if necessary,
change project specifications to allow for prewired armored cable products.

TARGET NICHE MARKETS. In order to penetrate higher margin, higher growth
specialty application niche markets, the Company has focused on the creation of
proprietary value added products. This strategy involves the successful transfer
of existing technology relating to its core products to new applications. For
example, the Company developed its Fire Alarm/Control Cable from its core
Metal-Clad (MC) Cable by adding a process-patented red stripe designed to
enhance identification by fire inspectors and prevent accidental disabling of
fire security systems. Specialty application cable products accounted for
approximately 9.2% and 10.5% of net sales for the years ended December 31, 1997
and 1996, respectively.

PURSUE COMPLEMENTARY ACQUISITIONS. The Company aggressively pursues
selective acquisitions of product lines, technologies or companies complementary
to its existing business and which the Company typically expects will be
accretive to earnings within the first twelve months of combined operations. For
example, the Company acquired B&B, a manufacturer and direct marketer of
electronic interfaces and connectors that facilitate data communications. In
addition to providing a high margin product line, B&B's direct mail and catalog
sales efforts serve as a complementary distribution channel for the Company's
other electrical products. The Company also recently acquired ALR, a
manufacturer of lighting controls. While the acquisition of ALR diversified the
Company's existing product line, the Company believes that it can leverage its
existing distribution network to increase sales and margins of ALR's products.
See "Summary--Recent Developments."

MAINTAIN POSITION AS LOW COST PRODUCER. The Company strives to be the low
cost producer in its major product lines without sacrificing its reputation for
high quality, innovative products. AFC's vertically integrated manufacturing
operations enable it to source primary raw materials at favorable prices and
terms, control inventories and better manage lead times. In addition, the
Company has improved its purchasing practices by entering into extended supply
contracts and using multiple suppliers. The Company continually reengineers its
products to optimize metal content within UL standards without sacrificing the
quality of its products.

EXPAND AND ENHANCE DISTRIBUTION INFRASTRUCTURE. The Company believes that
its distributor relationships are essential to maintaining its competitive
position in the industry. The Company's sales and marketing personnel regularly
educate and train distributors, electrical contractors and engineers on the
technological and cost benefits of the Company's products, as well as update
them on new product line introductions. The Company also participates as a
preferred vendor in marketing and buying groups such as Affiliated Distributors
and IMARK, which were developed to increase the access of independent, local
distributors to products such as those manufactured by the Company. The Company
also maintains its own fleet of trucks which it uses to deliver its products to
its customers and for inter-plant transfers of materials. The Company has
recently hired a senior sales executive to coordinate the Company's sales
efforts to large national accounts that the Company is currently serving through
local or regional sales efforts.

PRODUCTS

WIRE AND CABLE DIVISION. Wire and Cable Division products are utilized for
construction (both new and reconstruction, renovation and tenant improvement
projects) of offices, commercial buildings, industrial plants, shopping centers,
multifamily dwellings, hotels and health care, educational and recreational

21
<PAGE>
facilities. Wire and Cable Division products consist primarily of armored cable,
flexible conduit, specialty cables, flexible metal, plastic and fabric hoses,
ducting and connectors, electrical fittings and connectors and specialty
processed metals. Wire and Cable Division Products accounted for approximately
$181.0 million, or 82.2%, and approximately $144.3 million, or 89.1%, of the
Company's net sales for the years ended December 31, 1997 and 1996,
respectively.

Products manufactured by the Wire and Cable Division include the following:

- ARMORED CABLE is armor sheathed electrical cable that provides a versatile
and economical alternative to traditional pipe and wire. Fully
preassembled and tested, armored cable features excellent mechanical
protection, consistent color coding and a cost effective electrical
installation. Armored cable products are available in steel or aluminum
sheathing. Aluminum sheathed armored cable, which reduces a product's
weight by 30%, has gained wide customer acceptance over recent years due
to ease of preparation and installation and resulting cost savings. Sales
of armored cable were approximately $119.2 million, or 54.1%, and
approximately $96.2 million, or 59.4%, of the Company's net sales for the
years ended December 31, 1997 and 1996, respectively, representing year-
over-year growth of 23.9%.

METAL-CLAD (MC) Cable is a single, steel clad assembly used for power,
lighting, control and signal circuits. MC Cable has an internal insulated
solid copper ground wire for sensitive applications, including places of
public assembly such as convention halls and auditoriums. MC Cable is
available in a lighter weight aluminum version, MC Lite.

AC-90 is 90 DEG.C rated for branch circuits and feeders in commercial,
multi-unit residential and industrial applications and for hard wiring
fixtures and other high temperature applications. Designed for higher
thermal capability, AC-90 provides more usable power per conductor size.
AC-90 Lite is the line's lighter weight aluminum version.

- SPECIALTY CABLE products are specialized applications of the Company's
armored cable designed to meet a particular niche of the commercial
construction industry. Sales of specialty cable were approximately $20.2
million, or 9.2%, and approximately $17.0 million, or 10.5%, of the
Company's net sales for the years ended December 31, 1997 and 1996,
respectively, representing year-over-year growth of 18.8%.

HCF-90 is AC-90 cable that features a fully insulated ground wire
providing dual path grounding for branch circuits and feeders where a
dedicated ground is required. This product is designed primarily for
health care facilities and has a process-patented green striped armor
designed to enhance ease of installation and identification. HCF-90 is
available in a lighter weight aluminum version, HCF-90 Lite.

FIRE ALARM/CONTROL CABLE is MC Cable that features a process-patented red
striped armor that is designed to enhance identification by fire
inspectors and prevent accidental disabling of fire security systems.

SUPER NEUTRAL CABLE is MC Cable containing an oversized neutral conductor
for use in electrical systems in which nonlinear switching loads produce
additive, third order harmonic currents which may overload standard size
neutral conductors. Typical applications include computer systems,
business equipment, variable speed drives, electronic discharge lighting
and other switching mode power supplies.

JACKETED MC CABLE is MC Cable with an added polyvinyl chloride ("PVC")
jacket designed for maximum physical circuit protection and
identification, and is utilized for installations in wet locations, soil
and concrete.

HOME RUN CABLE is MC Cable that is designed to hold a 6, 8, 12 or 16 wire
insulated conductor assembly inside galvanized steel armor, and is
utilized for connection to power sources.

22
<PAGE>
OPTICAL FIBER JACKETED CABLE is MC Cable that features a process patented
orange striped armor that is designed for specific control, signaling and
data communications applications, such as robotics, video conferencing
and local area networks.

- FLEXIBLE CONDUIT is wireless conduit that provides mechanical protection
for electrical wiring where flexibility is required. Flexible conduit can
be made of steel, aluminum or plastic and is used in a variety of
construction applications as an alternative to pipe. Sales of flexible
conduit were approximately $23.6 million, or 10.7%, and approximately
$20.7 million, or 12.8%, of the Company's net sales for the years ended
December 31, 1997 and 1996, respectively, representing year-over-year
growth of 14.0%.

REDUCED WALL FLEXIBLE CONDUIT provides the strength and durability of
heavy gauge pipe at 40% less weight. It installs easily and is available
in sizes from 5/16" to 4" diameter. The Company also offers a Reduced
Wall Flexible Aluminum Conduit that provides the strength and durability
of steel at one-third the weight.

LIQUID-TIGHT FLEXIBLE CONDUIT, which is offered in both metallic and
plastic versions, has been designed for use in factories, foundries and
assembly plants. It features a flexible conduit covered by a PVC jacket
and is resistant to oil, gasoline, salt spray and toxic fumes. It is
available in sizes from 3/8" to 4" diameter.

OTHER FLEXIBLE CONDUIT includes flexible metal, fabric and plastic hoses,
ducting and connectors made for diverse applications such as heavy duty
vehicles, material handling and heating and ventilation systems.

- OTHER PRODUCTS of the Wire and Cable Division contributed approximately
$18.0 million, or 8.2%, and approximately $10.4 million, or 6.4%, of the
Company's net sales for the years ended December 31, 1997 and 1996,
respectively, representing year-over-year growth of 73.0%. Other products
include the following:

SPECIALTY PROCESSED METAL products have developed as a result of the
Company's ability to handle, slit and coil metals and supply galvanized
strip steel and various alloys of aluminum oscillate coils to a variety
of customers primarily in the petroleum drilling industry.

FITTINGS AND CONNECTORS are designed to connect armored cable and conduit
to electrical junction boxes and to join multiple types of conduit. These
products compliment the Company's AC, MC and Liquid-Tight product lines.

23
<PAGE>
AMERICA CABLE SYSTEMS DIVISION. America Cable Systems Division products
provide an integrated infrastructure for electrical, voice and data distribution
in a modular, plug-in fashion. The products are used primarily in office
buildings and retail centers with accessible ceilings and/or accessible floors,
and can be reused after retenanting or remodeling. America Cable Systems
Division products are completely preassembled for easy on-site installation and
are generally accompanied by detailed installation drawings produced by computer
aided drafting ("CAD") software. Therefore, these modular wiring products reduce
the time of initial installations, as well as the time required to make changes
in the office layout during the life of the building. The Company continues to
enhance its modular wiring systems used in broader premise wiring markets, which
encompass combined voice, data and electrical distribution. The Company also
markets through its America Cable Systems Division the lighting controls
manufactured by ALR and the electronic interfaces and connectors manufactured by
B&B. America Cable Systems Division products have been listed and labeled where
required in accordance with UL and CSA standards and comply with the NEC. See
"Quality Assurance." Sales of America Cable Systems Division products were
approximately $38.4 million, or 17.5%, and approximately $16.7 million, or
10.3%, of the Company's net sales for the years ended December 31, 1997 and
1996, respectively.

Products manufactured by the America Cable Systems Division include the
following:

- MODULAR WIRING SYSTEMS provide fast and efficient installation for
applications such as offices, health care facilities, industrial
facilities and educational institutions that require repetitive patterns
of branch circuit lighting fixtures and power outlets as well as a high
degree of flexibility to meet future needs. The Company estimates that
facilities can be completely "fitted out" with an integrated building
electrical infrastructure for lighting and power with total installed cost
savings of up to 40% over traditional wiring methods. Modular wiring
systems include PDQ devices and support mechanisms to which Custom Cut
wiring is attached. PDQ System Components enable prefabrication of the
entire electrical branch circuit distribution network at the factory and
complete system delivery to the job site. Modular wiring systems also
include the Company's electronic interfaces and connectors that facilitate
data communication. The Company is focusing on advanced modular wiring
systems for the premise wiring market, including The Intelligent Floor and
The Intelligent Ceiling. Premise wiring systems are custom engineered and
pre-assembled by the Company for modular installation and have the ability
to supply the voice, data and electrical requirements throughout an entire
facility. Sales of modular wiring systems were approximately $19.6
million, or 8.9%, and approximately $12.5 million, or 7.7%, of the
Company's net sales for the years ended December 31, 1997 and 1996,
respectively, representing year-over-year growth of 56.8%.

- LIGHTING PRODUCTS include lighting controls, temporary construction lights
and high bay lighting systems. Sales of lighting products were
approximately $14.9 million, or 6.8%, and approximately $0.7 million, or
0.4%, of the Company's net sales for the years ended December 31, 1997 and
1996, respectively. The increase in sales is primarily related to the
recent acquisition of ALR.

- CUSTOM CUTS AND FIXTURE WHIPS AND OTHER PRODUCTS provide builders with
factory cut branch circuit wiring used to connect convenience power
receptacles and lighting fixtures on the job site. Custom Cuts and Fixture
Whips significantly reduce installation time for branch circuit power
distribution systems. Other products include power poles and prenumbered
and prebundled conductors. Sales of Custom Cuts, Fixture Whips and other
products were approximately $3.9 million, or 1.8%, and approximately $3.7
million, or 2.3%, of the Company's net sales for the years ended December
31, 1997 and 1996, respectively, representing year-over-year growth of
5.4%.

24
<PAGE>
MARKETING

The Company's products are marketed through over 250 independent regional
sales representatives, including several located outside the United States.
Sales representatives do not exclusively market the Company's products. At
December 31, 1997, approximately 70 of the Company's domestic representatives
maintained product inventories on consignment. The independent sales
representatives are trained by the Company through a comprehensive marketing
program that includes a wide range of product literature, specification sheets
and technical brochures. The Company actively markets its advanced engineering
capabilities, including CAD, for custom designed integrated systems to
electrical contractors, construction engineers and building contractors. The
Company currently markets certain of its electronic interfaces and connectors
through direct mail and catalog sales and is considering expanding the scope of
its catalog offerings to certain of its core products. The Company advertises
certain of its product offerings in trade magazines and regularly participates
in industry trade shows. The domestic sales representatives are serviced by the
Company's fleet of trucks and trailers, which provide delivery and scheduled
stock replenishment. The Company believes that its internal trucking capability
gives it a competitive advantage by providing prompt delivery to its customers.

Commensurate with its strategy of promoting armored cable, flexible wiring
and flexible conduit as the preferred alternative to traditional labor intensive
pipe and wire installation methods, the Company has specifically focused its
marketing efforts at electrical contractors and inspectors, construction
consultants, architects and other end users. This marketing strategy is
particularly important to the marketing efforts of the America Cable Systems
Division as its products are often developed to custom specifications. The
Company's in-house telemarketing department and field representatives research
pending construction projects in an effort to change project specifications to
allow for the use of the Company's prewired armored cable products. The Wire and
Cable Division has had particular success with this specification strategy in
the area of specialty cable products where competition is relatively limited.
The Company expects to continue this marketing strategy as it develops new
products for broader premise wiring markets. The Company recently hired a senior
sales executive to coordinate the Company's sales efforts to large national
accounts that the Company is currently serving through local or regional sales
efforts.

Use of certain of the Company's armored cable products is not currently
permitted by local building codes in a limited number of municipalities,
including Chicago, San Antonio and Toledo. In several instances, the Company has
successfully illustrated to municipal building code authorities the benefits and
efficiencies of armored cable products over pipe and wire installations,
resulting in favorable changes in the particular municipality's building code.
For example, during the past three years, several municipalities, including
Charleston County, SC, Dade County, FL, Orange County, FL, the city of
Springfield, IL, the city of Tampa, FL and Sacramento County, CA, have amended
their building codes to approve the use of the Company's metal clad cables.
Although the Company expects to continue these efforts, there can be no
assurance that it will be successful in influencing other municipalities in
adopting similar code changes. The failure to obtain a change in these local
codes is not anticipated to have a material adverse effect on the Company's
business, operating results or financial condition.

CUSTOMERS

The Company sells its products primarily to distributors of electrical
products for resale to end users. Sales to distributors accounted for
approximately 80% and 87% of the Company's net sales during the years ended
December 31, 1997 and 1996, respectively. The Company's top ten customers have
traditionally accounted for approximately 30% of the Company's gross sales, with
no single customer accounting for more than five percent of gross sales. In
addition to sales to distributors, the Company directs significant marketing
efforts toward DIY retailers and OEMs. Sales to DIY retailers accounted for
approximately 7% of the Company's gross sales for each of the years ended
December 31, 1997 and 1996, and were comprised mostly of armored cable and
flexible conduit. Sales to OEMs accounted for approximately 9% and 6% of the
Company's gross sales for each of the years ended December 31, 1997 and 1996.

25
<PAGE>
COMPETITION

The Company faces competition for many of its core armored cable products
and for those products manufactured by the America Cable Systems Division. The
Company, however, has experienced less competition with respect to many of its
specialty cable products. The Company's competitors include both manufacturers
of products similar to those of the Company and producers of alternative
electrical, voice and data distribution systems, predominantly pipe and wire.
The number and size of the Company's competitors varies depending on the product
line. Competition can be generally categorized as either national in scope, with
companies that have substantial financial, research and development,
manufacturing and marketing resources, or regional in scope, with companies that
have more limited product offerings but compete effectively on the basis of
price.

The principal competitive factors in all product markets are price, quality,
product features, availability, customer support and distribution strength. The
relative importance of each of these factors varies depending on the specific
product category. As products mature, such as certain of the Company's core
armored cable products, competitive forces tend to drive down prices. In
contrast, the Company has been able to maintain higher margins on its specialty
cable products and certain of its products manufactured by the America Cable
Systems Division. There can be no assurances, however, that this trend will
continue. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business--Patents, Trademarks and Other Intellectual
Property."

MANUFACTURING

The Company's manufacturing operations utilize a wide variety of raw
materials for which it has multiple commercial sources, and include a broad
variety of processes reflective of the Company's product diversity. See "--Raw
Materials." Operations for cable manufacturing at the Wire and Cable Division
include drawing copper wire; extruding wire; slitting and galvanizing steel and
aluminum used for armor; wrapping, twisting and cutting wire; armoring
conductors; and testing for conductor continuity and grounding. The Company's
manufacturing equipment allows for a wide assortment of product categories, with
armored cable diameters ranging from 1/4" to 2" and flexible conduit diameters
ranging from 5/16" to 4". The America Cable Systems Division manufacturing
operations primarily consist of metal stamping, riveting, custom wire cutting,
component assembly and packaging operations. This division utilizes proprietary
tooling in its assembly techniques. Manufacturing operations at the Company's
two divisions are vertically integrated, which enables the Company to source
primary raw materials at favorable prices and terms, control inventories and
better manage lead times. The America Cable Systems Division uses remnants from
the Wire and Cable Division in its manufacturing process, thereby reducing the
Company's overall scrap ratio.

The Company is currently operating at close to existing capacity levels at
certain of its facilities and expects to use a portion of the net proceeds from
the offering and its existing cash balance over the next twenty-four months for
additional equipment and facilities to expand manufacturing capacity. See "Risk
Factors--Manufacturing Capacity" and "Use of Proceeds."

RAW MATERIALS

Copper, steel and aluminum used in manufacturing represented approximately
58% of cost of goods sold for the year ended December 31, 1997. The principal
raw material used by the Company is copper, which is purchased in the form of
redrawn rod from several domestic producers. Price terms are based on monthly
average copper prices, as determined by the New York Commodity Exchange, plus a
premium. The Company intends to purchase the majority of its 1998 copper
requirements from two vendors. The Company expects this practice to continue in
the future. See "Risk Factors--Substantial Price Competition, Margin Maintenance
and Prices of Raw Materials."

Other raw materials used by the Company include aluminum, galvanized steel,
molding materials, PVC and nylon, for which the Company generally has either
alternative sources of supply or access to alternative materials. Supplies of
these materials are adequate and are expected to remain so for the foreseeable
future.

26
<PAGE>
QUALITY ASSURANCE

The Company is committed to the philosophy that meeting industry standards
and codes is critical to its success, and its products are designed to satisfy
the safety and performance standards set by various industrial groups and
testing laboratories, including UL, CSA and BASEC.

The Company has implemented a Total Quality Management ("TQM") program which
is intended to maximize customer satisfaction while implementing cost effective
production methods. The Company's TQM program embodies an interlocking set of
procedures and practices that ensures employees in various departments are
adequately trained and directed to continuously implement improvements in
quality, service and cost savings. In connection with its TQM program, the
Company has obtained ISO 9001 certification at two of its facilities in New
Bedford, Massachusetts and ISO 9002 certification at its Byesville, OH facility.
ISO 9001 certification is a standard developed by the International Standards
Organization that provides a management systems model for process quality
assurance in design, development, installation and service. ISO 9002 is a
quality systems model for quality assurance in production, installation and
service. The Company believes that ISO 9001 and 9002 certifications signify
excellence in manufacturing and process integrity, thereby serving as a
competitive advantage and strengthening its marketing efforts. There can be no
assurance, however, that further certifications will be granted. The Company
believes that if additional certifications are not granted at its other
facilities, its business and competitive position will not be materially
adversely affected.

DEVELOPMENT, DESIGN AND ENGINEERING

The Company employs 53 draftsmen and engineers and 65 professional
technicians that are actively engaged in product and process development.
Development and design efforts often result from informal dialogues with major
electrical contractors, consulting engineers and facility managers, and
generally include product development, testing and analysis, component
development and testing, tooling design and resolution of process problems. The
Company fabricates some of the tooling and key machinery used in its cable
production.

The Company takes an active role in guiding industry standards. The Company
has representatives on the electrical section of the NFPA and the Industry
Advisory Council of UL and maintains ongoing relations with standards
enforcement organizations such as UL, the NFPA, the International Association of
Electrical Inspectors, the National Armored Cable Manufacturers Association and
the National Electrical Manufacturing Association.

PATENTS, TRADEMARKS AND OTHER INTELLECTUAL PROPERTY

The Company believes that its success depends more heavily on name
recognition, technical competence and the marketing abilities of its sales
representatives than on any individual patent, trademark or copyright.
Nevertheless, the Company intends to seek patent coverage for its products and
manufacturing technology where appropriate. The Company holds several patents
covering certain of its products and processes and also has several registered
trademarks. There can be no assurance, however, that the Company's patents will
provide adequate protection against competitors who develop or patent similar
technology. The Company has recently filed suit against one of its competitors
for infringement of the Company's process patented striped armored cable.
Although the Company has received a response to this claim, the litigation is at
an early stage and the outcome cannot presently be determined. There can be no
assurance, however, that the Company's patent will not be successfully
challenged and invalidated. See "Risk Factors--Competition" and
"Business--Competition."

The Company also relies upon trade secret protection for its confidential
and proprietary information. The Company routinely enters into confidentiality
agreements with its employees. There can be no assurance, however, that others
will not independently obtain similar information and techniques or otherwise
gain access to the Company's trade secrets or that the Company can effectively
protect its trade secrets.

27
<PAGE>
BACKLOG

The Company's business is characterized by short-term order and shipment
schedules rather than volume purchase contracts. Accordingly, the Company does
not consider backlog at any given date to be indicative of future sales.
Immediate delivery requirements and the nature of the Company's business
preclude any significant backlog.

FACILITIES

The following table provides information with respect to the Company's
facilities:

<TABLE>
<CAPTION>
OWNED/
LOCATION FACILITY TYPE SQUARE FEET LEASED
- ----------------------------- ---------------------------------------------------------- ----------- ---------
<S> <C> <C> <C>
New Bedford, MA(1)........... Assembly--America Cable Systems Division, Fittings and 123,000 Owned
Connectors, Administration, Engineering
New Bedford, MA.............. Manufacturing--Conduit and Cable 71,700 Owned
New Bedford, MA.............. Manufacturing--Wire, Administration, Engineering 64,000 Owned
New Bedford, MA.............. Trucking, Warehousing, Administration 48,000 Leased
New Bedford, MA.............. Warehousing 15,000 Leased
Fullerton, CA................ Manufacturing--Conduit and Cable, Warehousing 59,800 Leased
Largo, FL.................... Manufacturing--Conduit and Cable 39,800 Leased
Largo, FL.................... Distribution Center 25,500 Leased
Ottawa, IL(2)................ Manufacturing--Connectors 21,000 Owned
Burlington, NJ............... Manufacturing--Conduit and Cable, Warehousing 84,500 Leased
Hackettstown, NJ............. Manufacturing--Lighting Controls and Electrical Devices, 30,000 Leased
Administration
Hackettstown, NJ............. Warehousing 10,000 Leased
Linden, NJ................... Distribution Center 23,800 Leased
Cleveland, OH................ Warehousing; Administration 20,700 Leased
Reno, NV..................... Distribution Center 28,000 Leased
Byesville, OH................ Manufacturing--Metal Processing 37,000 Leased
Painesville, OH.............. Administration; Manufacturing--Conduit 49,000 Leased
Bensalem, PA................. Manufacturing--Metal Processing 28,800 Leased
Providence, RI............... Administration 2,500 Leased
Dallas, TX................... Manufacturing--America Cable Systems Division 45,300 Leased
</TABLE>

- ------------------------

(1) This property secures the repayment of the proceeds received from the
issuance of approximately $3.6 million in IRBs by the Massachusetts
Industrial Finance Agency in July 1996.

(2) This property secures the payment of a loan in the amount of $833,000.

The Company believes that its facilities are suitable for their present
intended purposes and adequate for the Company's current level of operations.
The Company, however, is operating at close to existing capacity levels at
certain of its facilities and expects to use a portion of the net proceeds from
the offering and its existing cash balance over the next twenty-four months for
additional equipment and facilities to expand manufacturing capacity. See "Risk
Factors--Manufacturing Capacity" and "Use of Proceeds." Additionally, the
Company is contemplating opening new distribution facilities to better serve its
customer base.

28
<PAGE>
EMPLOYEES

At February 28, 1998, the Company had 1,205 full-time employees of which 540
employees were represented by labor unions. The Company's union contracts expire
July 31, 1998, June 30, 1999, February 4, 2000 and February 23, 2001. Of the
Company's employees, 856 are in manufacturing, 107 in administration, 98 in
distribution, 82 in engineering and 62 in sales and marketing. The Company has
not experienced any work stoppages at its plants and believes its current
relations with its employees are good.

ENVIRONMENTAL/LEGAL PROCEEDINGS

The Company is a party to various nonenvironmental legal proceedings and
administrative actions, all of which are incidental to the operations of the
Company. In the opinion of the Company's management, such proceedings and
actions should not, individually or in the aggregate, have a material adverse
effect on the Company's financial condition or results of operations.

Regarding environmental matters, owners and operators of sites containing
hazardous substances, as well as generators of hazardous substances, are subject
to broad liability under various federal and state environmental laws and
regulations, including liability for clean up costs and damages arising out of
past disposal activity. The principal raw material used by the Company is
copper, which is classified as a hazardous substance. In addition, prior to the
Company's acquisition of its present business, it was engaged in certain
activities that may have utilized other hazardous substances. Governmental
authorities may seek to impose liability regardless of fault or the legality of
the original disposal activity and regardless of whether the Company is
otherwise currently responsible for liabilities with respect to such activities.
The Company has been named in connection with certain proceedings relating to
various properties currently being investigated or remediated for environmental
problems arising therefrom. The Company's business was formerly operated as
American Flexible Conduit Company Inc. ("American"), a manufacturer of flexible
conduit and armored cable products, which commenced operations in 1926. In 1969,
Nortek, Inc. ("Nortek") purchased the assets and liabilities of American and
subsequently transferred this business to its Monogram Industries, Inc.
("Monogram") subsidiary, incorporated in Delaware in September 1969. In December
1989, a corporation controlled by Mr. Papitto purchased Monogram from Nortek.
The purchasing corporation and Monogram were subsequently merged, with Monogram
becoming the surviving corporation. In October 1993, the Company changed its
name to AFC Cable Systems, Inc. Prior to the sale of the stock of Monogram by
Nortek in December 1989, Monogram transferred to another subsidiary of Nortek
all the assets and liabilities associated with the businesses not related to the
Company's present business operations. In connection with the sale of the stock
of Monogram, Nortek agreed to indemnify the Company, subject to certain
limitations, for liabilities and obligations of Monogram unrelated to the
business operations of Nortek's American Flexible Conduit Division, which had
been transferred to the Company in connection with such sale. With the exception
of property discussed below located in New Bedford, Massachusetts (the
"Sullivan's Ledge Site"), all of the properties being investigated or remediated
are unrelated to the business operations acquired.

In 1984, the United States Environmental Protection Agency ("EPA") placed
the Sullivan's Ledge Site on the National Priorities List, which is a list of
sites that the EPA has ranked in terms of priority for remedial action pursuant
to the Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"). Under CERCLA, all owners and operators (former and current) and
generators can be found jointly and severally liable with respect to the
Sullivan's Ledge Site. In March 1990, the EPA requested information from the
Company, and the Company admitted that between 1960 and 1969, American, the
predecessor of the business currently operated by the Company, had disposed of
waste metal at the site. A number of responsible parties entered into a consent
decree with regard to a portion of the Sullivan's Ledge Site in June 1991 and,
subsequently, such parties as plaintiffs (the "Plaintiffs") have sought
contribution in the United States District Court for the District of
Massachusetts from twelve corporations, including the Company and Nortek,
neither of which were named as potentially responsible parties by the EPA. In
the consent decree, the EPA estimated the cost of remediation at the Sullivan's

29
<PAGE>
Ledge Site to be approximately $10-$12 million. The Company has defended and
will continue to defend the action based upon its belief that its predecessors
contributed only DE MINIMIS amounts of waste material. On December 17, 1996, the
United States District Court for the District of Massachusetts entered a
judgment in favor of the Company with respect to this claim. As of March 31,
1998, there is an appeal pending with the U.S. Court of Appeals for the First
Circuit.

On March 12, 1998, The Township of Independence, New Jersey (the
"Township"), named one of the Company's wholly owned subsidiaries, ALR, in a
suit seeking compensation for expenses allegedly incurred by the Township in
connection with environmental contamination apparently caused by the predecessor
operator of the business of ALR. The Company believes that any amounts recovered
by the Township and other costs and expenses associated with this action are,
subject to certain limitations, covered by indemnification from the predecessor
entity and its stockholders under the related asset purchase agreement.

The Company is not able to predict with certainty the extent of its ultimate
liability with respect to any pending or future environmental matters. However,
the Company believes that any such liability with respect to the aforementioned
environmental matters will not have a material adverse effect upon its business,
financial condition or results of operations.

30
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company and their ages as of the
date hereof are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>

Ralph R. Papitto..................................... 71 Chairman of the Board, Chief Executive Officer and
Director

Robert R. Wheeler.................................... 53 President, Chief Operating Officer and Director

Raymond H. Keller.................................... 60 Vice President, Chief Financial Officer, Secretary,
Treasurer and Director

Anthony J. Santoro................................... 55 Director

Malcolm M. Donahue................................... 77 Director
</TABLE>

RALPH R. PAPITTO has been Chairman of the Board and a Director of the
Company since December 1989. Mr. Papitto has been Chief Executive Officer since
1995. Until 1990, Mr. Papitto was the Chairman of the Board, Chief Executive
Officer and a director of Nortek, an industrial conglomerate. Mr. Papitto
founded Nortek in 1967. In 1956, Mr. Papitto founded Glass-Tite Industries, Inc.
("Glass-Tite"), a manufacturer of electronic semiconductor components.
Glass-Tite was acquired by GTI Corporation in 1963. Mr. Papitto served as
Chairman of the Board of GTI Corporation until 1966. Mr. Papitto is also a
director of Lynch Corporation, a communications and multi-media services
company, and ACS Industries, Inc., a manufacturer of various industrial
products, and is also Chairman of the Board of Trustees of Roger Williams
University.

ROBERT R. WHEELER has been the President and Chief Operating Officer of the
Company since December 1995 and a Director of the Company since March 1996. Mr.
Wheeler was Executive Vice President and Chief Operating Officer of the Company
from October 1995 to December 1995. From 1992 to 1995, Mr. Wheeler served as
President and Chief Executive Officer of The North American Industrial Company
of BICC Cable, Inc.

RAYMOND H. KELLER has been Vice President and Chief Financial Officer of the
Company since December 1989 and a Director of the Company since October 1993.
From January 1989 until joining the Company, he served as the Vice President and
Chief Financial Officer of the American Flexible Conduit Division of Nortek.
Prior to that time, Mr. Keller held several positions with Microdot, Inc., a
multi-industry components manufacturer, most recently as Vice President and
Chief Financial Officer of the Microdot, Inc. operating companies. Mr. Keller
had been employed by Microdot, Inc. since 1972.

ANTHONY J. SANTORO has been a Director of the Company since October 1993.
Mr. Santoro has been President of Roger Williams University and Rogers Williams
University School of Law since August 1993 and served as Dean of Roger Williams
University School of Law from July 1992 to August 1993. Prior to that time, Mr.
Santoro served as Dean and Professor of Law at Widener University School of Law
from 1983 to 1992, Professor of Law at the University of Bridgeport School of
Law from 1976 to 1983 and Dean of the University of Bridgeport School of Law
from 1976 to 1980.

MALCOLM M. DONAHUE has been a Director of the Company since March 1996. Mr.
Donahue has been a Professor of Law at Suffolk University Law School since 1956.
From 1973 to 1991, Mr. Donahue was the Associate Dean of Suffolk University Law
School. Mr. Donahue also served as a director of Nortek, Inc. from 1988 to 1992.

31
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth the beneficial ownership of the Company's
Common Stock as of March 31, 1998 and as adjusted to reflect the sale of the
Common Stock being offered hereby (assuming no exercise of the Underwriters'
over-allotment option) by (i) each person or entity who is known by the Company
to own beneficially more than five percent (5%) of the outstanding shares of
Common Stock, (ii) each director and certain executive officers of the Company,
(iii) each Selling Stockholder and (iv) all directors and executive officers of
the Company as a group. The information as to each person has been furnished by
such person, and each person has sole voting power and sole investment power
with respect to all shares beneficially owned by such persons except as
otherwise indicated and subject to community property laws where applicable.
Unless otherwise indicated below, each person or entity listed maintains a
mailing address of c/o AFC Cable Systems, Inc., 55 Samuel Barnet Boulevard, New
Bedford, MA 02745.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED AFTER
PRIOR TO OFFERING(1) SHARES TO BE OFFERING(1)
----------------------- SOLD -----------------------
NUMBER PERCENT IN OFFERING NUMBER PERCENT
---------- ----------- ---------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
FMR Corp......................................... 1,479,950 12.9% -- 1,479,950 11.9%
82 Devonshire Street
Boston, MA 02109
Wellington Management Company, LLP............... 637,500 5.6% -- 637,500 5.1%
75 State Street
Boston, MA 02129
Ralph R. Papitto (2)............................. 2,423,657 21.1% 500,000 1,923,657 15.4%
Robert R. Wheeler (3)............................ 89,081 * 50,000 39,081 *
Raymond H. Keller (4)............................ 62,399 * -- 62,399 *
Malcolm M. Donahue (5)........................... 3,274 * -- 3,274 *
Anthony J. Santoro (6)........................... 5,000 * -- 5,000 *
The Papitto Foundation........................... 75,000 * 75,000 -- --
c/o State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
All Directors and Executive Officers of
the Company as a Group (5 persons) (7)......... 2,583,411 22.2% 550,000 2,033,411 16.2%
</TABLE>

- ------------------------

* Less than one percent.

(1) Based on 11,462,410 shares of Common Stock outstanding as of March 31, 1998
and approximately 12,475,928 shares of Common Stock outstanding after
completion of this offering.

(2) Includes 43,750 shares subject to stock options exercisable within sixty
days of the date hereof.

(3) Includes 61,250 shares subject to stock options exercisable within sixty
days of the date hereof (of which options to purchase 50,000 shares of
Common Stock are being exercised and the underlying shares are being sold in
the offering) and 19,977 shares of restricted stock on which forfeiture
provisions lapse with respect to 9,925 shares on March 11, 1999, and 5,026
shares on each of March 13, 1999 and March 13, 2000, and 1,050 shares held
pursuant to the Company's 401(k).

(4) Includes 48,437 shares subject to stock options exercisable within sixty
days of the date hereof, 9,205 shares of restricted stock on which
forfeiture provisions lapse with respect to 3,358 shares on March 11, 1999,
2,923 on March 13, 1999 and 2,924 on March 13, 2000 and 672 shares held
pursuant to the Company's 401(k).

(5) Includes 2,500 shares subject to stock options exercisable within sixty days
of the date hereof.

(6) Includes 3,750 shares subject to stock options exercisable within sixty days
of the date hereof.

(7) Includes the shares listed in (2)-(6) inclusive.

32
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 15,000,000 shares of
Common Stock, $.01 par value, and 1,000,000 shares of Preferred Stock, $.01 par
value (the "Preferred Stock"). As of March 31, 1998, there were 11,462,410
shares of Common Stock issued and outstanding and no shares of Preferred Stock
issued and outstanding. Subject to approval of the stockholders of the Company,
the Company intends to increase the number of its authorized shares of Common
Stock to 50,000,000.

COMMON STOCK

Holders of record of Common Stock are entitled to one vote for each share
held of record and do not have any preemptive, conversion or other rights to
subscribe for additional shares of Common Stock or any other securities of the
Company. There are no cumulative voting rights. Consequently, the holder or
holders of record of more than 50% of the outstanding shares of Common Stock can
elect all of the Company's Board of Directors. Immediately subsequent to the
offering, Mr. Papitto will hold approximately 15.4% of the Company's Common
Stock. As a result of his ownership, Mr. Papitto will be in a position to exert
significant influence over the affairs of the Company, including potential
acquisitions, sales and changes in control of the Company. See "Principal and
Selling Stockholders." Holders of record of Common Stock are entitled to such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. On liquidation, dissolution or winding up of the Company,
the holders of Common Stock are entitled to receive pro rata the net assets of
the Company remaining after the payment of all creditors and liquidation
preferences, if any. All issued and outstanding shares of Common Stock are, and
the shares offered hereby by the Company, when issued and paid for, will be
validly issued, fully paid and nonassessable.

PREFERRED STOCK

The Company's Board of Directors is authorized, subject to any limitations
prescribed by law, from time to time to issue up to an aggregate of 1,000,000
shares of Preferred Stock in one or more series, each of such series to have
such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and
such qualifications, limitations or restrictions thereof, as shall be determined
by the Board of Directors in a resolution or resolutions providing for the issue
of such Preferred Stock. Thus, any series, may, if so determined by the Board of
Directors, have full voting rights with the Common Stock or superior or limited
voting rights, be convertible into Common Stock or another security of the
Company, and have such other relative rights, preferences and limitations as the
Company's Board of Directors shall determine. As a result, any class or series
of Preferred Stock could have rights which would adversely affect the rights of
the holders of the Common Stock. The shares of any class or series of Preferred
Stock need not be identical. The Company has no present intention to issue any
of its authorized shares of Preferred Stock. However, the issuance of a new
series of Preferred Stock, while providing desirable flexibility in connection
with possible acquisitions or other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or discouraging a third
party from acquiring, a majority of the outstanding voting stock of the Company.

REGISTRATION RIGHTS

In connection with the acquisition of B&B Electronics Manufacturing Company
("B&B"), the Company and the prior stockholders of B&B (the "Prior B&B
Stockholders") entered into a Registration Rights Agreement (the "B&B
Registration Agreement") with respect to the 75,000 shares of Common Stock
delivered to the Prior B&B Stockholders in partial payment of the purchase
price. In connection with the acquisition of the Federal Hose Division of
FLEXFAB Horizons International, Inc. ("FLEXFAB"), the Company also entered into
a Registration Rights Agreement with FLEXFAB (the "FLEXFAB Registration Rights
Agreement") with respect to the 11,364 shares of Common Stock

33
<PAGE>
delivered to FLEXFAB in partial payment of the Purchase Price. Each of the B&B
Registration Agreement and FLEXFAB Registration Rights Agreement provides,
subject to certain limitations, that if the Company registers any of its Common
Stock for its own account or for the account of other security holders, the
Prior B&B Stockholders and FLEXFAB are entitled to include their shares of
Common Stock in the registration. The Prior B&B Stockholders and FLEXFAB have
elected not to participate in the offering.

The Company expects to issue approximately 11,000 additional shares of
Common Stock of the Company to the Prior B&B Stockholders in connection with the
satisfaction of certain earnout payments relating to the year ended December 31,
1997. The additional shares of Common Stock are subject to the registration
rights set forth in the B&B Registration Agreement.

CERTAIN CHARTER AND BY-LAW PROVISIONS

The Company's Certificate of Incorporation and By-Laws contain certain
provisions that are intended to enhance the likelihood of continuity and
stability in the composition of the Board of Directors of the Company and in the
policies formulated by the Board of Directors and to delay, defer or prevent a
change in control of the Company if the Board determines that such a change in
control is not in the best interest of the Company and its stockholders. These
provisions could have the effect of discouraging certain attempts to acquire the
Company or remove incumbent management even if some or a majority of the
Company's stockholders deemed such an attempt to be in the Company's best
interest.

Pursuant to the Certificate of Incorporation and By-Laws of the Company, the
Board of Directors of the Company is divided into three classes serving
staggered three year terms. Directors can be removed from office only for cause
and only by the affirmative vote of a majority of the voting power of the then
outstanding shares of capital stock of the Company entitled to vote generally in
the election of directors. Management believes that these provisions (the
"Provisions"), taken together, reduce the possibility that a third party could
effect a change in the composition of the Board of Directors of the Company
without the support of the incumbent board. The Provisions, however, may have
significant effects on the ability of stockholders of the Company to change the
composition of the incumbent board, to benefit from transactions which are
opposed by the incumbent board, to assume control of the Company or effect a
fundamental corporate transaction such as a merger. Nevertheless, although the
Company has not experienced any problems in the past with the continuity or
stability of the board, management believes that the Provisions help assure the
continuity and stability of the Company's policies in the future, since the
majority of the directors at any time will have prior experience as directors of
the Company.

The Certificate of Incorporation provides that so long as the Company has a
class of capital stock registered under the Securities Exchange Act of 1934, all
stockholder action must be effected at a duly called meeting, and not by a
consent in writing. The Certificate of Incorporation also prohibits any
stockholder from directly calling a special meeting of stockholders of the
Company.

The Certificate of Incorporation authorizes and the By-Laws establish
procedures, including advance notice procedures, with regard to the nomination,
other than by or at the direction of the Board of Directors, of candidates for
election as directors and with regard to certain matters to be brought before
meetings of stockholders of the Company. In general, notice must be received by
the Company not less than 60 days nor more than 90 days prior to the meeting and
must contain certain specified information concerning the stockholder submitting
the proposal and the persons to be nominated or the matters to be brought before
the meeting. In addition, the By-Laws require that any such nomination of
candidate for election as a director be accompanied by a petition signed by at
least 100 record holders of capital stock entitled to vote generally in the
election of directors, representing in the aggregate 1% or more of the
outstanding capital stock entitled to vote thereon. Such procedures also
authorize regulation of the order of business and conduct of stockholder
meetings, the authority of the presiding officer and attendance at such
meetings.

34
<PAGE>
The Certificate of Incorporation also contains supermajority voting
provisions intended to protect the Company's stockholders from certain possible
abuses in connection with unsolicited attempts to gain control of the Company.
These provisions require the affirmative vote of the holders of 80% of the
outstanding shares of capital stock of the Company entitled to vote generally in
the election of directors to approve a "Business Combination" (a broadly defined
term which includes mergers and other major corporate transactions) involving
the Company and a Related Person (as defined below). The special voting
requirements do not apply if the "continuing directors" (as defined in the
Certificate of Incorporation) approve the Business Combination or the
transaction in which a person becomes a Related Person. A "Related Person" is
defined as any individual, corporation, partnership, unincorporated association
or other person or entity, together with its affiliates and associates, which
beneficially owns (as defined in the Certificate of Incorporation) 5% or more of
the Company's outstanding voting stock but does not include persons and their
affiliates and associates who beneficially owned 5% or more of the Company's
outstanding voting stock on April 1, 1994. The Board of Directors is permitted
pursuant to the Certificate of Incorporation to consider special factors, such
as employee welfare and the future prospects of the Company, when evaluating
proposed tender or exchange offers or Business Combinations. The affirmative
vote of 80% of the outstanding shares of capital stock entitled to vote
generally in the election of directors, excluding shares beneficially owned by a
Related Person, is required to amend the provisions referred to above relating
to the approval of Business Combinations.

The requirement of a supermajority vote to approve Business Combinations
could enable a minority of the Company's stockholders to exercise veto powers
over such transactions. The Company's executive officers and directors will
retain beneficial ownership of approximately 15.6% of the Company's Common Stock
outstanding after the offering.

The Certificate of Incorporation provides that no director of the Company
shall be liable to the Company or its stockholders for monetary damages for any
breach of fiduciary duty, except to the extent otherwise required by Delaware
General Corporation Law ("DGCL"). This provision does not prevent stockholders
from obtaining injunctive or other equitable relief against directors nor does
it shield directors from liability under federal or state securities laws.

DELAWARE ANTITAKEOVER LAW

Generally, under Section 203 of the DGCL (the "Delaware antitakeover law"),
certain "business combinations" between a Delaware corporation and an
"interested stockholder" are prohibited for a three year period following the
date such stockholder became an interested stockholder, unless: (i) the
corporation has elected in its certificate of incorporation not to be governed
by the Delaware antitakeover law; (ii) the business combination was approved by
the board of directors of the corporation before the other party to the business
combination became an interested stockholder; (iii) upon consummation of the
transaction that made it an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
commencement of the transaction (excluding voting stock owned by directors who
are also officers or held in employee benefit plans in which the employees do
not have a confidential right to tender or vote stock held by the plan); or (iv)
the business combination was approved by the board of directors of the
corporation and ratified by two thirds of the voting stock which the interested
stockholder did not own. The three-year prohibition also does not apply to
certain business combinations proposed by an interested stockholder following
the announcement or notification of certain extraordinary transactions involving
the corporation and a person who had not been an interested stockholder during
the previous three years or who became an interested stockholder with the
approval of a majority of the corporation's directors. The term "business
combination" is defined generally to include mergers or consolidations between a
Delaware corporation and an "interested stockholder," transactions with an
"interested stockholder" involving the assets or stock of the corporation or its
majority-owned subsidiaries and transactions which increase an interested
stockholder's percentage ownership of stock. The term "interested stockholder"
is defined generally as those stockholders who become beneficial

35
<PAGE>
owners of 15% or more of a Delaware corporation's voting stock. The Company has
elected in its Certificate of Incorporation not to be governed by the Delaware
antitakeover law.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Boston EquiServe,
L.P.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, based upon the number of shares
outstanding as of March 31, 1998, the Company will have approximately 12,475,928
shares of Common Stock outstanding. Of these shares, all but 1,936,843 shares
will be freely tradeable without restriction or further registration under the
Securities Act of 1933, as amended (the "Securities Act"), except for any shares
purchased by an "affiliate" of the Company as that term is defined in Rule 144
under the Securities Act (an "Affiliate"). Any shares purchased in this offering
or in the open market by an Affiliate may not be resold except pursuant to an
effective registration statement filed by the Company or an applicable exemption
from registration, including an exemption under Rule 144.

The Company's 1993 Equity Incentive Plan, 1993 Stock Option Plan for
Non-Employee Directors and 1997 Equity Incentive Plan (collectively, the
"Plans") allow it to issue options and other awards covering up to an aggregate
of 1,125,000 shares of Common Stock to its directors, employees and consultants,
of which options for 835,312 shares are currently issued and outstanding,
subject to vesting, and of which 179,601 shares of restricted stock are issued
and outstanding and subject to forfeiture restrictions. The Company previously
filed registration statements under the Securities Act to register shares of
Common Stock reserved for issuance under the Plans. Subject to the volume
limitations applicable to Affiliates under Rule 144 and the Lock-up Agreements
described below, the shares registered under such registration statements are
available for sale in the open market, except to the extent that such shares are
subject to vesting restrictions with the Company.

The Company's Board of Directors has recently approved the 1998 Equity
Incentive Plan which will allow the Company to issue to its directors, employees
and consultants options and other awards covering up to an aggregate of 600,000
shares of Common Stock outstanding following the consummation of the offering.
The 1998 Equity Incentive Plan is subject to approval by the Company's
Stockholders at their annual meeting. Pending such approval, the Company has
authorized the issuance of options to purchase 350,500 shares of Common Stock to
certain employees and intends to file a registration statement under the
Securities Act to register the shares of Common Stock reserved for issuance
under the Plan.

In general, under Rule 144, a person, including an Affiliate, who has
beneficially owned restricted securities for at least one year is entitled to
sell, within any three-month period, a number of such shares that does not
exceed the greater of (i) 1% of the then outstanding shares of Common Stock or
(ii) the average weekly trading volume in the Common Stock during the four
calendar weeks preceding the date on which notice of such sale is filed,
provided that certain requirements concerning availability of public
information, manner of sale and notice of sale are satisfied. In addition, under
Rule 144(k), a person who is not an Affiliate and has not been an Affiliate for
at least three months prior to the sale and who has beneficially owned
restricted securities for at least two years is entitled to sell such shares
immediately without compliance with the foregoing requirements of Rule 144. In
meeting the one- and two-year holding periods described above, a holder of
restricted securities can include the holding periods of a prior owner who was
not an Affiliate. The one- and two-year holding periods do not begin to run
until the full purchase price or other consideration is paid by the person
acquiring the restricted securities from the issuer or an Affiliate.

The Company, its executive officers, directors, and certain employees,
certain of the Prior B&B Stockholders, and FLEXFAB, who in the aggregate hold
1,995,825 shares of Common Stock (after giving effect to the sale of the shares
of Common Stock hereby), have agreed for a period of 180 days after the

36
<PAGE>
date of this Prospectus not to sell or otherwise dispose of any shares of Common
Stock or securities convertible into or exchangeable for Common Stock without
the prior written consent of the Representatives except for: (i) the sale of the
shares hereunder; (ii) the issuance by the Company of Common Stock pursuant to
the exercise of options under the Company's equity based plans; (iii) the grant
by the Company of stock options after the date of this Prospectus under the
Company's equity based plans; or (iv) transfers by gift, will or intestacy or to
immediate family members, provided that the transferee agrees to the same
limitations. In addition, Sutro & Co. Incorporated ("Sutro"), one of the
representatives of the underwriters of the Company's initial public offering,
has agreed for a period of 180 days after the date of this Prospectus not to
dispose of 16,018 shares of Common Stock without the prior written consent of
the Representatives. See "Underwriting."

The Prior B&B Stockholders and FLEXFAB are entitled to certain registration
rights. See "Description of Capital Stock--Registration Rights."

No prediction can be made as to the effect, if any, that market sales of
shares or the availability of shares for sale will have on the market price of
the Common Stock prevailing from time to time. Sales of significant amounts of
the Common Stock in the public market could adversely affect the market price of
the Common Stock.

37
<PAGE>
UNDERWRITING

The Underwriters named below have severally agreed, subject to the terms and
conditions of the Underwriting Agreement, to purchase from the Company and the
Selling Stockholders the number of shares of Common Stock set forth opposite
their respective names below. The Underwriters are committed to purchase and pay
for all such shares if any are purchased.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- --------------------------------------------------------------------------------- ----------
<S> <C>
Tucker Anthony Incorporated...................................................... 375,000
Robert W. Baird & Co. Incorporated............................................... 375,000
Jefferies & Company, Inc......................................................... 375,000
The Robinson-Humphrey Company, LLC............................................... 375,000
----------
Total........................................................................ 1,500,000
----------
----------
</TABLE>

The Underwriters have advised the Company and the Selling Stockholders that
they propose to offer the Common Stock to the public on the terms set forth on
the cover page of this Prospectus. The Underwriters may allow selected dealers a
concession of not more than $1.00 per share, and the Underwriters may allow, and
such dealers may re-allow, a concession of not more than $.10 per share to
certain other dealers. After the public offering, the price and concessions and
reallowances to dealers may be changed by the Underwriters. The Common Stock is
offered subject to receipt and acceptance by the Underwriters and to certain
other conditions, including the right to reject orders in whole or in part.

The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to a maximum of 225,000
additional shares of Common Stock to cover overallotments, if any. If the
Underwriters exercise such option, the Underwriters have severally agreed,
subject to certain conditions, to purchase such additional shares in
approximately the same proportion as set forth in the foregoing table. The
Underwriters may exercise such option only to cover over-allotments, if any, in
connection with this offering.

The Underwriters have informed the Company that they do not expect to make
any sales to accounts over which the Underwriters exercise discretionary
authority.

The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the several Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or will
contribute to payments the Underwriters may be required to make in respect
thereof.

The Company, its executive officers, directors, and certain employees,
certain of the Prior B&B Stockholders and FLEXFAB have agreed not to offer, sell
or otherwise dispose of any shares of Common Stock or any equity securities or
securities convertible into or exchangeable for equity securities or any
options, rights or warrants with respect to any equity securities for a period
of 180 days after the date of this Prospectus without the prior written consent
of the Representatives except for: (i) the sale of the shares hereunder; (ii)
the issuance by the Company of Common Stock pursuant to the exercise of options
under the Company's equity based plans; (iii) the grant by the Company of stock
options after the date of this Prospectus under the Company's equity based
plans; or (iv) transfers by gift, will or intestacy or to immediate family
members, provided that the transferee agrees to the same limitations. In
addition, Sutro has agreed for a period of 180 days after the date of this
Prospectus not to dispose of 16,018 shares of Common Stock without the prior
written consent of the Representatives. See "Shares Eligible for Future Sale."

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit

38
<PAGE>
bids to purchase the underlying security so long as the stabilizing bids do not
exceed a specific maximum. Syndicate covering transactions involve purchases of
the securities in the open market after the distribution has been completed in
order to cover syndicate short positions. Penalty bids permit the
Representatives to reclaim a selling concession from a syndicate member when the
securities originally sold by such syndicate member are purchased in a syndicate
covering transaction to cover syndicate short positions. Such stabilizing
transactions, syndicate covering transactions and penalty bids may cause the
price of the securities to be higher than it would otherwise be in the absence
of such transactions. These transactions may be effected on the Nasdaq National
Market or otherwise and, if commenced, may be discontinued at any time.

LEGAL MATTERS

The validity of the shares of Common Stock offered by the Company hereby
will be passed upon for the Company by Ropes & Gray, Boston, Massachusetts.
Certain legal matters will be passed upon for the Underwriters by Peabody &
Brown, Boston, Massachusetts.

EXPERTS

The consolidated financial statements and schedule of the Company at
December 31, 1996 and 1997, and for each of the three years in the period ended
December 31, 1997, appearing or incorporated by reference in this Prospectus and
the related Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing elsewhere
or incorporated by reference herein and in such Registration Statement, and are
included in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the reporting requirements of the Exchange Act and
in accordance therewith files annual and quarterly reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Judiciary
Plaza, Washington, D.C. 20549, as well as at the Commission's Regional Offices
at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
The Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding the Company; the address of such site
is http:// www.sec.gov. The Company's Common Stock is quoted on the Nasdaq
National Market. Reports, proxy and information statements and other information
concerning the Company can also be inspected at the National Association of
Securities Dealers, Inc. at 1735 K Street, N. W., Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
omits certain of the information contained in the Registration Statement and the
exhibits and schedules thereto on file with the Commission pursuant to the
Securities Act and the rules and regulations of the Commission thereunder. For
further information with respect to the Company and its Common Stock, reference
is made to the Registration Statement and the exhibits and schedules thereto.
Statements contained in this Prospectus regarding the contents of any agreement
or other document filed as an exhibit to the Registration Statement are not
necessarily complete, and in each instance reference is made to the copy of such
agreement filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. The Registration Statement,
including the exhibits and

39
<PAGE>
schedules thereto, can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at certain of its Regional Offices at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission pursuant to the Exchange
Act are incorporated by reference in this Prospectus: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 as filed with
the Commission on March 31, 1998 (ii) the Company's Proxy Statement for the 1998
Annual Meeting of Stockholders and (iii) the description of the Company's Common
Stock contained in the Company's Registration Statement on Form 8-A filed under
Section 12 of the Exchange Act, including any amendment or report updating such
description. All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the initial filing
of the Registration Statement and prior to the termination of this offering,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the respective dates of the filing of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of any such person, a
copy of any and all of such documents (other than exhibits to such documents
which are not specifically incorporated by reference into such documents).
Requests for such copies should be directed to the Chief Financial Officer, AFC
Cable Systems, Inc., 55 Samuel Barnet Boulevard, New Bedford, MA 02745
(Telephone Number (508) 998-1131).

40
<PAGE>
INDEX TO FINANCIAL STATEMENTS

ANNUAL FINANICAL STATEMENTS OF THE COMPANY:

CONTENTS

<TABLE>
<S> <C>
Report of Independent Auditors........................................................ F-2
Consolidated Balance Sheets--December 31, 1996 and 1997............................... F-3
Consolidated Statements of Income--Years ended December 31, 1995, 1996, and 1997...... F-4
Consolidated Statements of Shareholders' Equity--Years ended December 31, 1995, 1996
and 1997............................................................................ F-5
Consolidated Statements of Cash Flows--Years ended December 31, 1995, 1996, and
1997................................................................................ F-6
Notes to Financial Statements......................................................... F-7
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
AFC Cable Systems, Inc.

We have audited the accompanying consolidated balance sheets of AFC Cable
Systems, Inc. as of December 31, 1997 and 1996 and the related consolidated
statements of income, shareholders' equity, and cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
AFC Cable Systems, Inc. at December 31, 1997 and 1996, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1997, in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

Providence, Rhode Island
February 17, 1998

F-2
<PAGE>
AFC CABLE SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1996 1997
--------- ---------

<CAPTION>
($ IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (NOTE 1)......................................................... $ 980 $ 2,803
Marketable securities (NOTE 3)............................................................. 30,508 40,434
Accounts receivable, net of allowance for doubtful accounts and sales allowances of $3,140
in 1996 and $3,870 in 1997............................................................... 23,919 32,127
Inventories:
Finished goods........................................................................... 11,559 26,333
Work-in-process.......................................................................... 3,702 7,385
Raw materials............................................................................ 5,665 6,219
--------- ---------
20,926 39,937
Current deferred taxes (NOTE 9).............................................................. 637 1,491
Other current assets......................................................................... 1,121 1,439
--------- ---------
Total current assets......................................................................... 78,091 118,231
Property, plant and equipment:
Land....................................................................................... 510 1,190
Buildings and improvements................................................................. 8,754 10,173
Machinery and equipment.................................................................... 16,050 23,207
Furniture and fixtures..................................................................... 1,791 2,412
Construction in progress................................................................... 83 364
--------- ---------
27,188 37,346
Less accumulated depreciation.............................................................. 9,482 12,409
--------- ---------
Net property, plant and equipment............................................................ 17,706 24,937
Goodwill, net of accumulated amortization of $122 in 1996 and $373 in 1997................... 1,175 16,497
Other long-term assets, net.................................................................. 951 1,464
--------- ---------
Total assets................................................................................. $ 97,923 $ 161,129
--------- ---------
--------- ---------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.......................................................... $ 270 $ 227
Revolving credit note payable (NOTE 4)..................................................... 2,000 6,230
Accounts payable........................................................................... 12,471 12,536
Accrued expenses:
Payroll and employee benefits............................................................ 2,506 3,609
Other (NOTE 6)........................................................................... 1,885 7,488
--------- ---------
Total accrued expenses..................................................................... 4,391 11,097
--------- ---------
Total current liabilities.................................................................... 19,132 30,090
Long-term debt (NOTE 4)...................................................................... 3,300 3,893
Deferred income taxes (NOTE 9)............................................................... 1,547 1,570
Other long-term liabilities.................................................................. 954 2,441
Commitments and contingencies (NOTES 7 AND 8)................................................ -- --
Shareholders' equity (NOTE 10):
Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued.................. -- --
Common stock, $.01 par value, 15,000,000 shares authorized, 9,168,781 and 11,397,854 shares
issued and outstanding in 1996 and 1997, respectively.................................... 73 114
Paid-in capital............................................................................ 48,011 79,110
Other...................................................................................... 218 1,021
Treasury stock, 6,031 and 6,411 shares in 1996 and 1997, respectively, at cost............. (82) (92)
Retained earnings.......................................................................... 24,770 42,982
--------- ---------
Total shareholders' equity................................................................... 72,990 123,135
--------- ---------
Total liabilities and shareholders' equity................................................... $ 97,923 $ 161,129
--------- ---------
--------- ---------
</TABLE>

See accompanying notes.

F-3
<PAGE>
AFC CABLE SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
<S> <C> <C> <C>
1995 1996 1997
---------- ---------- ----------

<CAPTION>
($ IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Net sales................................................................... $ 139,483 $ 161,868 $ 220,264
Cost of goods sold.......................................................... 107,087 118,487 156,479
---------- ---------- ----------
Gross profit................................................................ 32,396 43,381 63,785
Selling, general and administrative expenses................................ 21,926 26,384 35,483
---------- ---------- ----------
Income from operations...................................................... 10,470 16,997 28,302
Other income (expense):
Interest expense.......................................................... (614) (728) (620)
Investment income......................................................... 3,001 2,339 2,141
Other, net................................................................ 39 (48) (192)
---------- ---------- ----------
2,426 1,563 1,329
---------- ---------- ----------
Income before income taxes.................................................. 12,896 18,560 29,631
Income taxes (NOTE 9)....................................................... 4,791 7,100 11,392
---------- ---------- ----------
Net income.................................................................. $ 8,105 $ 11,460 $ 18,239
---------- ---------- ----------
---------- ---------- ----------
Basic earnings per common share (NOTE 11)................................... $ .92 $ 1.25 $ 1.71
---------- ---------- ----------
---------- ---------- ----------
Diluted earnings per common share (NOTE 11)................................. $ .90 $ 1.23 $ 1.66
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

See accompanying notes.

F-4
<PAGE>
AFC CABLE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
RETAINED
EARNINGS
COMMON PAID-IN TREASURY (ACCUMULATED
STOCK CAPITAL OTHER STOCK DEFICIT) TOTAL
----------- --------- --------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
($ IN THOUSANDS)
Balance at December 31, 1994.......................... $ 55 $ 25,871 $ (744) $ -- $ 5,205 $ 30,387
Net income for 1995................................... -- -- -- -- 8,105 8,105
Proceeds from issuance of 2,203,125 shares of common
stock............................................... 18 21,906 -- -- -- 21,924
Repurchase of restricted stock, net................... -- -- -- (30) -- (30)
Amortization of compensation (NOTE 10)................ -- -- 191 -- -- 191
Exercise of stock options (NOTE 10)................... -- 140 -- -- -- 140
Adjustment to unrealized gains (losses) on
available-for-sale securities, net of tax........... -- -- 593 -- -- 593
Other................................................. -- 1 -- -- -- 1
--- --------- --------- --- ------------ ----------
Balance at December 31, 1995.......................... 73 47,918 40 (30) 13,310 61,311
Net income for 1996................................... -- -- -- -- 11,460 11,460
Repurchase of restricted stock, net................... -- -- -- (52) -- (52)
Amortization of compensation (NOTE 10)................ -- -- 189 -- -- 189
Cancellation of 32,375 restricted shares.............. -- (276) 276 -- -- --
Exercise of stock options and related tax benefit
(NOTE 10)........................................... -- 369 -- -- -- 369
Adjustment to unrealized gains (losses) on
available-for-sale securities, net of tax........... -- -- (287) -- -- (287)
--- --------- --------- --- ------------ ----------
Balance at December 31, 1996.......................... 73 48,011 218 (82) 24,770 72,990
Net income for 1997................................... -- -- -- -- 18,239 18,239
Proceed from issuance of 1,937,500 shares of common
stock............................................... 16 27,552 -- -- -- 27,568
Repurchase of restricted stock, net................... -- -- -- (10) -- (10)
Amortization of compensation (NOTE 10)................ -- -- 15 -- -- 15
Employee stock awards................................. 1 651 -- -- -- 652
Exercise of stock options and warrants and related tax
benefit (NOTE 10)................................... -- 647 -- -- -- 647
Issuance of 136,364 shares of common stock for
acquisitions and related fees (NOTE 2).............. 1 2,249 -- -- -- 2,250
Adjustment to unrealized gains (losses) on
available-for-sale securities, net of tax........... -- -- 788 -- -- 788
Five-for-four stock split effected in the form of a
dividend............................................ 23 -- -- -- (27) (4)
--- --------- --------- --- ------------ ----------
Balance at December 31, 1997.......................... $ 114 $ 79,110 $ 1,021 $ (92) $ $42,982 $ 123,135
--- --------- --------- --- ------------ ----------
--- --------- --------- --- ------------ ----------
</TABLE>

See accompanying notes.

F-5
<PAGE>
AFC CABLE SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- --------- ---------

<CAPTION>
($ IN THOUSANDS)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income....................................................................... $ 8,105 $ 11,460 $ 18,239
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation................................................................... 1,860 2,235 2,927
Amortization of intangibles.................................................... 195 776 251
Net gain on sale of property, plant and equipment.............................. -- (54) --
Net gain realized on available-for-sale securities............................. (1,720) (618) (88)
Deferred income taxes.......................................................... 12 77 (428)
Provision for bad debts........................................................ 76 263 209
Provision for sales allowances................................................. 480 719 193
Compensation expense for restricted stock and compensatory options............. 292 239 91
Increase (decrease) in cash arising from changes in assets and liabilities:
Accounts receivable.......................................................... (2,694) (4,326) (2,935)
Inventories.................................................................. (6,732) (1,564) (14,001)
Other current assets......................................................... (289) (106) (197)
Other long-term assets....................................................... (996) (431) (403)
Accounts payable............................................................. 899 631 (2,958)
Accrued payroll and employee benefits........................................ (80) 1,030 969
Other accrued liabilities.................................................... (703) 974 1,747
Other long-term liabilities.................................................. -- 154 1,486
--------- --------- ---------
Net cash provided by (used in) operating activities.............................. (1,295) 11,459 5,102

INVESTING ACTIVITIES
Acquisitions, including expenses, less cash acquired (NOTE 2).................... -- -- (20,598)
Capital expenditures, net........................................................ (2,340) (6,970) (7,687)
Proceeds from sale of property, plant and equipment.............................. -- 195 --
Purchase of available-for-sale securities........................................ (44,907) (29,063) (47,505)
Proceeds from sale of available-for-sale securities.............................. 22,601 24,349 40,350
--------- --------- ---------
Net cash used in investing activities............................................ (24,646) (11,489) (35,440)
FINANCING ACTIVITIES
Proceeds from revolving line of credit borrowings................................ 52,948 60,615 94,375
Repayments of revolving line of credit borrowings................................ (49,523) (65,540) (90,145)
Proceeds from term loan.......................................................... -- 3,200 --
Repayment of term loan........................................................... -- (3,200) --
Proceeds from long-term debt..................................................... -- 3,570 --
Payments on long-term debt, including current portion............................ -- -- (271)
Proceeds from issuance of common stock........................................... 22,065 327 28,212
Purchase of treasury stock....................................................... (30) (52) (10)
--------- --------- ---------
Net cash provided by (used in) financing activities.............................. 25,460 (1,080) 32,161
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents............................. (481) (1,110) 1,823
Cash and cash equivalents at beginning of year................................... 2,571 2,090 980
--------- --------- ---------
Cash and cash equivalents at end of year......................................... $ 2,090 $ 980 $ 2,803
--------- --------- ---------
--------- --------- ---------
Supplemental schedule of cash flow information:
Cash paid during the year for interest......................................... $ 614 $ 814 $ 580
--------- --------- ---------
--------- --------- ---------
Cash paid during the year for income taxes..................................... $ 5,863 $ 6,058 $ 10,103
--------- --------- ---------
--------- --------- ---------
</TABLE>

See accompanying notes.

F-6
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

AFC Cable Systems, Inc. (the Company) is a manufacturer of electrical
distribution products, including prewired armored cable, flexible conduit and
modular wiring systems used in the nonresidential construction electrical wiring
industry. The Company, through its wholly-owned subsidiaries, also manufacturers
and distributes photo controls for the lighting control and fixture industries,
electronic interfaces and connectors that facilitate data communications, and
flexible hoses, ducting and connections for diverse applications. The Company's
customers primarily consist of electrical supply wholesalers located throughout
the United States. The Company performs credit evaluations on all new customers
and generally does not require collateral. Credit losses are provided for in the
financial statements and consistently have been within management's
expectations.

CONSOLIDATION

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

CASH EQUIVALENTS

Cash equivalents are defined as all short-term, highly-liquid investments
with an original maturity of three months or less.

MARKETABLE SECURITIES

Management determines the appropriate classification of marketable
securities at the time of purchase and reevaluates such designation as of each
balance sheet date. All debt and equity securities have been classified as
available-for-sale.

Available-for-sale securities are carried at fair value based on quoted
market prices, with the unrealized gains and losses, net of tax, reported in a
separate component of shareholders' equity. The amortized cost of debt
securities in this category is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization is included in investment
income. Realized gains and losses and declines in value judged to be
other-than-temporary on available-for-sale securities are included in investment
income. The cost of securities sold is based on the specific identification
method. Interest and dividends on securities classified as available-for-sale
are included in investment income.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost of substantially
all of the inventory is determined on a first-in, first-out (FIFO) basis.

F-7
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION

Property, plant and equipment are stated at cost. Depreciation is computed
on the straight-line method over the estimated lives of the assets as follows:

<TABLE>
<S> <C>
Buildings and improvements.................................... 5 to 30
years
Machinery and equipment....................................... 3 to 10
years
Furniture and fixtures........................................ 5 to 10
years
</TABLE>

GOODWILL

Goodwill consists of the excess cost over the fair value of the assets of
acquired businesses (see Note 2) and is being amortized using the straight-line
method over periods of twenty to forty years.

SELF-INSURANCE

The Company is self-insured for its employee health and workers'
compensation plans. The plans, which are administered by insurance companies,
contain certain stop loss provisions that limit the Company's liability in the
event of catastrophic losses. Claims are accrued for as incurred based on
available claim information and management's estimate of claims incurred but not
yet reported.

STOCK COMPENSATION

The Company accounts for its stock compensation arrangements under the
provisions of APB 25, "Accounting for Stock Issued to Employees."

REVENUE RECOGNITION

The Company recognizes sales when goods are shipped to the customer.

ADVERTISING COSTS

Advertising costs are expensed as incurred and were $854,000, $950,000, and
$1,567,000 in 1995, 1996 and 1997, respectively.

EARNINGS PER SHARE

The Company has adopted Financial Accounting Standards Board Statement No.
128, "Earnings Per Share" ("FAS 128"), which was issued in 1997. FAS 128
requires the presentation of "basic earnings per share" and "diluted earnings
per share." Basic earnings per share represents net income divided by the
weighted average number of shares of common stock outstanding during the year.
Diluted earnings per share represents net income divided by weighted average
shares outstanding adjusted for the dilutive effect of the assumed exercise of
outstanding options and warrants. Earnings per share amounts for all periods
have been presented, and where appropriate, restated to conform to the
requirements of FAS 128.

F-8
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In 1997, the Financial Accounting Standards Board issued Statement No. 130,
"Reporting Comprehensive Income" and Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information." The Company is currently
evaluating the effects of implementing these statements which are effective
beginning in 1998.

RECLASSIFICATION

Certain reclassifications were made to the 1995 and 1996 financial
statements in order that they may be consistent with the 1997 presentation.

2. ACQUISITIONS

During the year ended December 31, 1997, the Company made the acquisitions
set forth below, each of which has been accounted for as a purchase. The
consolidated financial statements of the Company include the operating results
of each business from the date of acquisition.

B&B ELECTRONICS MANUFACTURING COMPANY, INC.

On January 28, 1997, the Company acquired all of the outstanding stock of
Illinois-based B&B Electronics Manufacturing Company, Inc. ("B&B"), a
manufacturer and distributor of electronic interfaces and connectors that
facilitate data communications. The cost of B&B consisted of $4.2 million in
cash, 75,000 shares of the Company's common stock ($960,000), plus fees of
approximately $73,000, and assumed debt. Contingent consideration, which is in
addition to the above acquisition costs, will be paid to the seller of B&B for
certain earnings targets achieved by B&B for the year ended December 31, 1997,
and will be payable for subsequent annual periods if certain earnings targets
are met for such periods. The contingent consideration payable for the period
ended December 31, 1997, is approximately $600,000. Contingent consideration is
recorded as additional purchase price when the future earnings targets have been
met.

AREA LIGHTING RESEARCH, INC.

On January 31, 1997, the Company acquired certain assets and assumed certain
liabilities of New Jersey-based Area Lighting Research, Inc. ("ALR"), a
designer, manufacturer and distributor of photo controls and electrical devices
for the lighting control and fixture industries. The cost of ALR consisted of
$7.7 million in cash plus 50,000 shares of common stock issued in payment of
fees (approximately $1 million). Contingent consideration, in addition to the
above costs, is payable to the seller of ALR for certain financial targets
achieved by ALR for the year ended December 31, 1997. The contingent
consideration payable for the year ended December 31, 1997, is approximately
$400,000 and was recorded as additional purchase price.

F-9
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

2. ACQUISITIONS (CONTINUED)
MADISON EQUIPMENT COMPANY, INC.

On April 1, 1997, the Company acquired all of the outstanding stock of
Ohio-based Madison Sale Corporation, a supplier of fittings for the electrical
industry. Upon purchase, the name of the company was changed to Madison
Equipment Company, Inc. ("Madison"). The cost of Madison consisted of $2.0
million in cash plus approximately $85,000 in fees.

FEDERAL HOSE MANUFACTURING, INC.

On November 22, 1997, the Company acquired the assets and assumed certain
liabilities of Ohio-based Federal Hose Manufacturing, Inc. ("FHI"), a
manufacturer and distributor of flexible metal, plastic and fabric hoses,
ducting and connectors for diverse applications. The cost of FHI consisted of
$7.2 million in cash, 11,364 shares of the Company's common stock ($300,000)
plus fees of approximately $265,000. Contingent consideration is payable to the
seller of FHI based upon future earnings targets through December 31, 2000. The
purchase price allocation of FHI is preliminary.

The goodwill resulting from the above acquisitions will be amortized over 40
years, with the exception of the goodwill from the Madison acquisition, which
will be amortized over a 20-year period. Pro forma income statement data
assuming the acquisitions above were made at the beginning of 1996 and 1997, is
as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
($ IN THOUSANDS,
EXCEPT PER SHARE DATA)
Net sales....................................................... $ 197,427 $ 235,356
Income from operations.......................................... 19,352 29,117
Net income...................................................... 12,795 18,754
Diluted earnings per common share............................... $ 1.36 $ 1.70
</TABLE>

The above pro forma information does not purport to represent the Company's
results of operations that would have been attained had the above acquisitions
in fact occurred at the beginning of the periods indicated or to project the
Company's results for any future period.

F-10
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

3. MARKETABLE SECURITIES

The following is a summary of securities held by the Company. All securities
are classified as available-for-sale.

<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED FAIR
COST GAINS LOSSES VALUE
--------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
($ IN THOUSANDS)
DECEMBER 31, 1996
U.S. corporate debt securities................................ $ 1,509 $ 92 $ -- $ 1,601
U.S. treasury securities and obligations of U.S. Government
agencies.................................................... 26,193 52 (6) 26,239
Equity securities............................................. 2,576 168 (76) 2,668
--------- ----------- ----- -------
Total included in investments................................. $ 30,278 $ 312 $ (82) $ 30,508
--------- ----------- ----- -------
--------- ----------- ----- -------

DECEMBER 31, 1997
U.S. corporate debt securities................................ $ 9,464 $ 329 $ (3) $ 9,790
U.S. treasury securities and obligations of U.S. Government
agencies.................................................... 24,713 55 (2) 24,766
Equity securities............................................. 4,894 1,096 (112) 5,878
--------- ----------- ----- -------
Total included in investments................................. $ 39,071 $ 1,480 $ (117) $ 40,434
--------- ----------- ----- -------
--------- ----------- ----- -------
</TABLE>

F-11
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

3. MARKETABLE SECURITIES (CONTINUED)
The cost and fair market value of debt securities at December 31, 1996 and
1997, by contractual maturities, are shown below:

<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE
----------------------
FAIR MARKET
COST VALUE
--------- -----------
<S> <C> <C>
($ IN THOUSANDS)
DECEMBER 31, 1996
Debt securities:
Maturing in one year or less........................................ $ 23,884 $ 23,948
Maturing between one year and five years............................ 2,762 2,780
Maturing after five years........................................... 1,056 1,112
--------- -----------
27,702 27,840
Equity securities..................................................... 2,576 2,668
--------- -----------
Total investments..................................................... $ 30,278 $ 30,508
--------- -----------
--------- -----------

DECEMBER 31, 1997
Debt securities:
Maturing in one year or less........................................ $ 15,031 $ 15,296
Maturing between one year and five years............................ 17,931 17,983
Maturing after five years........................................... 1,215 1,277
--------- -----------
34,177 34,556
Equity securities..................................................... 4,894 5,878
--------- -----------
Total investments..................................................... $ 39,071 $ 40,434
--------- -----------
--------- -----------
</TABLE>

Expected maturities will differ from contractual maturities because the
issuers of the securities may have the right to prepay obligations without
prepayment penalties. Realized gains and (losses) included in investment income
amounted to $1,720,000 in 1995 and $859,000 and ($241,000) in 1996, and $173,000
and ($85,000) in 1997.

4. SHORT AND LONG-TERM DEBT

REVOLVING CREDIT NOTE PAYABLE

The Company has an unsecured revolving line of credit agreement which
provides for direct borrowings of up to $25,000,000 of which up to $10,000,000
is available for business acquisitions, without the lender's prior consent. The
line of credit agreement provides for letter of credit borrowings of up to
$3,000,000, of which $821,000 is outstanding at December 31, 1997. A monthly fee
based on the unused portion of the credit facility is payable under the
agreement.

Borrowings under the line of credit are available at interest rates equal to
either the lender's base rate or the Eurodollar rate plus one half of one
percent to one and one quarter percent for a fixed period of one, two, three or
six months or one year. The Company has the option of electing the applicable
rate upon notification to the lender and as a result, portions of the
outstanding balance accrue interest at different rates. The weighted average
rate of outstanding short-term borrowings is 6.3% and 8.5% at

F-12
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

4. SHORT AND LONG-TERM DEBT (CONTINUED)
December 31, 1996 and 1997, respectively. The carrying value of the line of
credit approximates its fair value.

The line of credit contains certain restrictive covenants, which require
that the Company maintain minimum levels of tangible capital funds and meet
other specified ratio requirements.

LONG-TERM DEBT

During 1996, the Company received the proceeds from the issuance of $3.57
million in Industrial Revenue Bonds ("IRBs") through the Massachusetts
Industrial Finance Agency for the purpose of acquiring and refurbishing a 99,000
square-foot manufacturing facility in New Bedford, Massachusetts, which secures
the IRBs. The IRBs mature on July 24, 2016, and carry an interest rate
adjustable on a weekly basis. The IRBs carried an average interest rate of
approximately 3.5% and 3.75% for the years ended December 31, 1996 and 1997,
respectively. Additionally, an annual fee of 1.0% on the letter of credit
securing the bonds ($3.6 million at December 31, 1997) is paid to the bank
acting as trustee in the issuance of the bonds. The Company has the right to
convert from the weekly interest rate to a fixed rate established at the time of
conversion. The bonds are payable in 19 annual installments of $180,000 with a
final payment of $150,000 due at maturity funded through monthly payments of
$15,000 to the trustee over the twelve months preceding the installment due
dates. At December 31, 1996 and 1997, $3.3 million and $3.1 million,
respectively, of the total was classified as long-term debt. The carrying amount
of the bonds approximates fair value at December 31, 1997.

In addition, $774,000 of the $828,000 in debt assumed in the B&B acquisition
was classified as long-term at December 31, 1997. This represents a mortgage on
the facility occupied by B&B. The mortgage carries a fixed rate of 8% and
matures on February 20, 2012. The carrying amount approximates fair value at
December 31, 1997.

The following is a schedule of the principal portion of long-term debt
payments for the years beginning December 31, 1997, and after:

<TABLE>
<CAPTION>
($ IN
THOUSANDS)
<S> <C>
1998......................................................................... $ 227
1999......................................................................... 214
2000......................................................................... 218
2001......................................................................... 221
2002......................................................................... 224
Thereafter................................................................... 3,016
------
$ 4,120
------
------
</TABLE>

5. EMPLOYEE BENEFIT PLANS

The Company sponsors a Supplemental Executive Retirement Plan (the "Plan")
for senior management. The Plan is a defined contribution plan whereby
participant accounts are credited in an amount equal to a percentage, determined
by the Company, of each participant's compensation plus the participant's
allocable share of net earnings of the Plan. At December 31, 1996 and 1997, the
Company has assets (market value of $900,000 and $1,304,000, respectively),
segregated in a trust, available to meet the

F-13
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

5. EMPLOYEE BENEFIT PLANS (CONTINUED)
obligations of the Plan. Expenses for this plan were approximately $190,000 for
the year ended December 31, 1995 and $276,000 for each of the years ended
December 31, 1996 and 1997. The total liability under the Plan was approximately
$976,000 and $1,334,000 at December 31, 1996 and 1997, respectively.

The Company also has seven defined contribution (401(k)) plans covering
substantially all employees. Contributions to the plans are based on a
percentage of the employee's compensation. The Company also participates in a
multi-employer defined contribution plan covering certain union employees. The
Company's expense under the 401(k) and multi-employer plans was approximately
$437,000, $449,000, and $699,000, for the years ended December 31, 1995, 1996,
and 1997, respectively.

6. OTHER ACCRUED EXPENSES

At December 31, 1996 and 1997, other accrued expenses consisted of the
following:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
($ IN THOUSANDS)
Accrued federal and state income taxes..................................... $ 257 $ 1,634
Investment margin liability................................................ -- 1,550
Other...................................................................... 1,628 4,304
--------- ---------
$ 1,885 $ 7,488
--------- ---------
--------- ---------
</TABLE>

The investment margin liability, which bears interest, represents borrowings
secured by the Company's marketable securities.

7. COMMITMENTS

The Company has various operating lease agreements for buildings and
equipment extending through December 2006. The following is a schedule of the
future minimum rental payments due under these leases:

<TABLE>
<CAPTION>
($ IN
THOUSANDS)
<S> <C>
1998......................................................................... $ 3,335
1999......................................................................... 2,535
2000......................................................................... 2,165
2001......................................................................... 1,862
2002......................................................................... 1,520
Thereafter................................................................... 2,218
-------
$ 13,635
-------
-------
</TABLE>

Rent expense amounted to $3,088,056, $3,738,390, and $3,863,045, in 1995,
1996, and 1997, respectively.

In the normal course of business, the Company enters into purchase
agreements with certain raw material vendors. At December 31, 1997, the Company
has agreed to purchase approximately 100% of the 1998 copper usage from two
vendors.

F-14
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

8. CONTINGENCIES

The Company is a defendant in certain claims that relate to matters that
occurred prior to the present ownership. In accordance with the purchase and
sale agreement of the Company, the prior owner has indemnified the Company for
such claims and, accordingly, the matters are being defended by the prior owners
and its insurance companies. Management is of the opinion that these claims
relate to the prior owners and therefore will not have a material adverse effect
on the Company's financial position or results of operations.

Additionally, the Company is a party to one environmental matter and certain
other legal proceedings not covered by the indemnification. In the environmental
matter, a number of responsible parties entered into a consent decree with the
EPA in 1991 and subsequently, such parties as plaintiffs have sought
contribution from the Company, which was not named as a responsible party by the
EPA. The Company has admitted that a predecessor of the business currently
operated by the Company had disposed of a de minimus amount of waste at the
site. On December 17, 1996, the U.S. District Court for the District of
Massachusetts entered a judgment in favor of the Company with respect to this
claim. As of December 31, 1997, there is an appeal pending with the U.S. Court
of Appeals for the First Circuit.

9. INCOME TAXES

Deferred income taxes are recognized for the expected consequences of
temporary differences by applying enacted statutory rates, applicable to future
years, to differences between the financial reporting basis and tax basis of
assets and liabilities.

The principal reasons that the aggregate income tax provisions differ from
the U.S. statutory rate of 34% for the years ended December 31, 1995 and 1996
and 35% for the year ended December 31, 1997, are as follows:

<TABLE>
<CAPTION>
1995 1996 1997
-------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
($ IN THOUSANDS)
Income tax provision at statutory rate................. $ 4,385 34.0% $ 6,310 34.0% $ 10,371 35.0%
State taxes, net of federal benefit.................... 380 3.0% 666 3.6% 1,082 3.7%
Other.................................................. 26 .2% 124 .7% (61) (.2%)
--------- --- --------- --- --------- ---
$ 4,791 37.2% $ 7,100 38.3% $ 11,392 38.5%
--------- --- --------- --- --------- ---
--------- --- --------- --- --------- ---
</TABLE>

F-15
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

9. INCOME TAXES (CONTINUED)
The components of the provision for income taxes for the years ended
December 31, 1995, 1996, and 1997, are as follows:

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
($ IN THOUSANDS)
Current:
Federal..................................................... $ 4,154 $ 6,018 $ 10,072
State....................................................... 625 1,005 1,748
--------- --------- ---------
Total current................................................. 4,779 7,023 11,820
Deferred:
Federal..................................................... 53 58 (344)
State....................................................... (41) 19 (84)
--------- --------- ---------
Total deferred................................................ 12 77 (428)
--------- --------- ---------
Total......................................................... $ 4,791 $ 7,100 $ 11,392
--------- --------- ---------
--------- --------- ---------
</TABLE>

A summary of the significant components of the Company's deferred tax
liabilities and assets as of December 31, 1996 and 1997, follows:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
($ IN THOUSANDS)
Deferred tax liabilities:
Fixed assets............................................................. $ 1,857 $ 1,976
Marketable securities.................................................... 134 604
--------- ---------
Total deferred tax liabilities............................................. 1,991 2,580
Deferred tax assets:
Supplemental executive retirement plan................................... 389 523
Goodwill................................................................. 13 34
Stock compensation....................................................... 19 90
Inventory................................................................ 315 702
Allowance for doubtful accounts.......................................... 142 342
Accrued liabilities...................................................... 203 810
--------- ---------
Total deferred tax assets.................................................. 1,081 2,501
--------- ---------
Net deferred tax liabilities............................................... $ 910 $ 79
--------- ---------
--------- ---------
</TABLE>

10. SHAREHOLDERS' EQUITY AND STOCK AWARD PLANS

SHAREHOLDERS' EQUITY

In the Company's Initial Public Offering in December 1993, the Company sold
to the underwriters warrants to purchase up to 206,925 shares of common stock
(prior to giving effect to the October 20, 1997 five-for-four stock split) at an
exercise price equal to $12.00 per share. Such warrants are not transferable and
are exercisable through December 14, 1998. During 1997, warrants to purchase
103,462 shares (prior to giving effect to the October 20, 1997 five-for-four
stock split) were exercised. After giving effect to the

F-16
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

10. SHAREHOLDERS' EQUITY AND STOCK AWARD PLANS (CONTINUED)
October 20, 1997 stock split explained below, there are 129,328 shares of common
stock issuable upon exercise of remaining warrants at an exercise price of $9.60
per share.

As more fully described below, on September 16, 1997, the Company's Board of
Directors authorized a five-for-four split of the Company's common stock. All
references to number of shares, per share amounts, stock option data and prices
of the Company's common stock have been restated to present the effect of the
stock split.

On February 9, 1995, the Company completed the issuance of 1,875,000 shares
of common stock at a price of $10.80 per share. As part of this offering, the
Company granted the underwriters an option to purchase a maximum of 328,125
additional shares to cover over-allotments, which was exercised on February 9,
1995. Also on February 9, 1995, 312,500 shares of common stock were sold to the
public by certain shareholders of the Company at a price of $10.80.

On April 23, 1997, the Company completed the issuance of 1,562,500 shares of
common stock at a price of $15.40 per share. As part of this offering, the
Company granted the underwriters an option to purchase a maximum of 375,000
additional shares to cover over-allotments which was exercised in full on April
29, 1997. Also, on April 23, 1997, 937,500 shares of common stock were sold to
the public by certain shareholders of the Company at a price of $15.40.

On September 16, 1997, the Company's Board of Directors authorized a
five-for-four split of the Company's common stock effected in the form of a 25
percent stock dividend distributed on October 20, 1997, to shareholders of
record on October 6, 1997. Shareholders' equity has been adjusted by
reclassifying from retained earnings to common stock the par value of the
additional shares arising from the split. The amount of cash paid in lieu of
fractional shares resulting from the split was also charged to retained
earnings.

STOCK AWARD PLANS

The Company has two equity incentive plans covering employees of the
Company; the AFC Cable Systems, Inc. 1993 Equity Incentive Plan and the AFC
Cable Systems, Inc. 1997 Equity Incentive Plan (collectively, the "Plans").
Under the Plans, the Company may grant stock options, stock appreciation rights,
restricted stock, unrestricted stock, deferred stock and performance stock
awards to key employees. Each of the Plans provides for the issuance of 500,000
shares of common stock. Options awarded under the Plans generally vest in equal
annual installments over either the four or the five years subsequent to the
date of grant. The options expire ten years after the date of grant.

The Company also has a stock plan covering non-employee directors; the AFC
Cable Systems, Inc. 1993 Stock Option Plan for Non-Employee Directors (the
"Directors' Plan"). Under the Directors' Plan, the Company may grant stock
options to non-employee directors which vest in equal annual installments over
the five years subsequent to the date of grant and expire ten years after date
of grant. The Directors' Plan provides for the issuance of 125,000 shares of
common stock.

F-17
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

10. SHAREHOLDERS' EQUITY AND STOCK AWARD PLANS (CONTINUED)
A summary of the status of stock options granted under all plans as of
December 31, 1995, 1996 and 1997, and changes during the years then ended is
presented below:

<TABLE>
<CAPTION>
1995 1996 1997
------------------------ ------------------------ ------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
FIXED OPTIONS SHARES PRICE SHARES PRICE SHARES PRICE
- -------------------------------------------- --------- ------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year............ 331,250 $ 7.98 370,000 $ 8.42 400,000 $ 9.03
Granted..................................... 56,250 10.80 100,000 10.80 557,500 16.70
Exercised................................... (17,500) 8.00 (40,000) 8.20 (39,062) 8.61
Canceled.................................... -- -- (30,000) 8.40 (17,187) 8.71
--------- ------ --------- ------ --------- ------
Outstanding at end of year.................. 370,000 $ 8.42 400,000 $ 9.03 901,251 $ 13.80
--------- ------ --------- ------ --------- ------
--------- ------ --------- ------ --------- ------
Options exercisable at year end............. 91,250 $ 7.99 128,125 $ 8.19 174,062 $ 8.53
--------- ------ --------- ------ --------- ------
--------- ------ --------- ------ --------- ------
Weighted-average fair value of options
granted during year....................... $ 4.46 $ 4.47 $ 6.98
--------- --------- ---------
--------- --------- ---------
</TABLE>

The following table summarizes information about stock options outstanding
at December 31, 1997:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------ -------------------------
NUMBER WEIGHTED NUMBER
OUTSTANDING AVERAGE WEIGHTED EXERCISABLE WEIGHTED
AT REMAINING AVERAGE AT AVERAGE
RANGE OF DECEMBER 31 CONTRACTUAL EXERCISE DECEMBER 31 EXERCISE
EXERCISE PRICES 1997 LIFE (YRS.) PRICE 1997 PRICE
- -------------------------------------------------- ------------ --------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
$5.60 to $10.60................................... 268,751 6.98 $ 8.14 142,812 $ 7.69
$12.00 to $17.80.................................. 556,250 8.96 15.06 31,250 12.38
$19.40 to $27.06.................................. 76,250 9.67 24.54 -- --
------------ ------------
901,251 174,062
------------ ------------
------------ ------------
</TABLE>

As discussed above, common stock may be granted to officers and key
employees on a restricted or unrestricted basis. At December 31, 1995, 1996, and
1997, restricted stock awards covering 61,875, 1,250 and 67,350 shares,
respectively, were outstanding. During 1995, 1996 and 1997, the restrictions
lapsed on 29,375, 28,250 and 1,250 shares, respectively, and 32,375 restricted
shares were forfeited during 1996. Employees vest in these restricted shares
ratably over periods of two to three years. The difference between the par value
and the fair market value of the stock on the date of grant was considered
compensation and was amortized ratably over the vesting period. The Company
repurchased, at fair market value, 3,110 shares, 2,917 shares and 380 shares of
vested restricted stock during 1995, 1996 and 1997, respectively, to provide
certain employees with the funds necessary to cover their tax withholdings from
the receipt of vested restricted shares.

The 67,350 shares of restricted stock outstanding at December 31, 1997,
which represent performance-based compensation for 1996, were awarded to
officers and key employees under the 1997 Plan.

F-18
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

10. SHAREHOLDERS' EQUITY AND STOCK AWARD PLANS (CONTINUED)
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123 (FAS No. 123), "Accounting for
Stock-Based Compensation." Accordingly, compensation cost has been recognized in
the financial statements only for stock options that are compensatory as defined
under APB 25. Had compensation cost for the Company's three stock option plans
been determined based on the fair value at the grant date for awards made in
1995, 1996 and 1997 consistent with the provisions of FAS No. 123, the Company's
net earnings and earnings per share would have been the pro forma amounts
indicated below:

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
($ IN THOUSANDS,
EXCEPT PER SHARE DATA)
Net income, as reported....................................... $ 8,105 $ 11,460 $ 18,239
Net income, pro forma......................................... 8,093 11,383 17,765
Basic earnings per common share, as reported.................. $ .92 $ 1.25 $ 1.71
Basic earnings per common share, pro forma.................... .91 1.25 1.67
Diluted earnings per common share, as reported................ $ .90 $ 1.23 $ 1.66
Diluted earnings per common share, pro forma.................. .90 1.23 1.62
</TABLE>

The fair values of the options were estimated at the date of grant using the
Black-Scholes option pricing model. The following assumptions were used for the
1995, 1996 and 1997 stock option grants:

<TABLE>
<CAPTION>
1995 1996 1997
GRANTS GRANTS GRANTS
---------- ---------- ----------
<S> <C> <C> <C>
Risk-free interest rate.................................. 5.8% 5.8% 5.7%
Expected option life..................................... 4.3 years 4.4 years 4.4 years
Expected market price volatility......................... 40% 40% 41%
Expected dividend yield.................................. 0% 0% 0%
</TABLE>

The effects on pro forma net income and earnings per common share of
expensing the estimated fair value of stock options are not necessarily
representative of the effects on reported net income for future years due to
such things as the vesting period of the stock options and the potential for
issuance of additional stock options in future years. Additionally, because FAS
No. 123 is applicable only to options granted subsequent to December 31, 1994,
its pro forma effect will not be fully reflected until 1998.

Shares of capital stock reserved for possible future issuance are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Options granted..................................................... 400,000 901,251
Options as yet ungranted............................................ 108,625 163,462
Qualified employee savings plans.................................... 625,000 625,000
---------- ----------
1,133,625 1,689,713
---------- ----------
---------- ----------
</TABLE>

F-19
<PAGE>
AFC CABLE SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996

11. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
per share for the years ended December 31:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ------------
<S> <C> <C> <C>
Net income (in thousands)................................................. $8,105 $11,460 $18,239
Basic average shares...................................................... 8,851,403 9,133,650 10,663,876
Effect of dilutive securities:
Stock options and stock awards 132,312 90,874 263,505
Stock warrants.......................................................... 63,640 63,791 89,162
Contingently issuable shares............................................ -- -- 6,998
---------- ---------- ------------
195,952 154,665 359,665
Dilutive average shares................................................... 9,047,355 9,288,315 11,023,541
---------- ---------- ------------
---------- ---------- ------------
Basic earnings per share.................................................. $0.92 $1.25 $1.71
---------- ---------- ------------
---------- ---------- ------------
Diluted earnings per share................................................ $0.90 $1.23 $1.66
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited quarterly results of operations
for 1996 and 1997 (dollars in thousands, except per share data):
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------
MARCH JUNE SEPTEMBER DECEMBER FULL
30 29 28 31 YEAR
--------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1996
Net sales............................................... $ 33,885 $ 42,218 $ 41,559 $ 44,206 $ 161,868
Income from operations.................................. 2,047 4,283 5,259 5,408 16,997
Net income.............................................. 1,636 2,904 3,350 3,570 11,460
Basic earnings per common share......................... $ 0.18 $ 0.32 $ 0.37 $ 0.39 $ 1.25
Diluted earnings per common share....................... $ 0.18 $ 0.31 $ 0.36 $ 0.38 $ 1.23

QUARTER ENDED
----------------------------------------------
MARCH JUNE SEPTEMBER DECEMBER FULL
29 28 27 31 YEAR
--------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>

1997
Net sales............................................... $ 47,787 $ 54,210 $ 56,704 $ 61,563 $ 220,264
Income from operations.................................. 5,505 6,820 7,681 8,296 28,302
Net income.............................................. 3,460 4,387 4,978 5,414 18,239
Basic earnings per common share......................... $ 0.37 $ 0.41 $ 0.44 $ 0.48 $ 1.71
Diluted earnings per common share....................... $ 0.36 $ 0.40 $ 0.43 $ 0.46 $ 1.66
</TABLE>

F-20
<PAGE>
[PHOTO: BUILDINGS IN WHICH COMPANY'S PRODUCTS ARE INSTALLED]
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
-----------
<S> <C>
Prospectus Summary......................... 3
Risk Factors............................... 7
Use of Proceeds............................ 11
Price Range of Common Stock................ 11
Dividend Policy............................ 11
Capitalization............................. 12
Selected Consolidated Financial Data....... 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 14
Business................................... 19
Management................................. 31
Principal and Selling Stockholders......... 32
Description of Capital Stock............... 33
Shares Eligible for Future Sale............ 36
Underwriting............................... 38
Legal Matters.............................. 39
Experts.................................... 39
Available Information...................... 39
Incorporation of Certain Documents by
Reference................................ 40
Index to Financial Statements.............. F-1
</TABLE>

------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDERS OR BY ANY UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE
DATE HEREOF OR THAT THERE HAVE NOT BEEN CHANGES IN THE AFFAIRS OF THE COMPANY
SINCE THAT DATE.

1,500,000 SHARES

[LOGO]

AFC CABLE SYSTEMS, INC.

COMMON STOCK

------------------

PROSPECTUS

------------------

May 12, 1998

TUCKER ANTHONY
INCORPORATED
ROBERT W. BAIRD & CO.
INCORPORATED
JEFFERIES & COMPANY, INC.
THE ROBINSON-HUMPHREY
COMPANY

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