Electrical Wholesaling Magazine estimates the U.S. electrical distribution market had industry-wide sales of $74.3 billion in 2005 and will grow 7.9% to $80.2 billion in 2006. Electrical distribution has historically been a growing segment of the industrial distribution industry, with a CAGR of 5.1% over the last 20 years. According to the U.S. Census Bureau, the total value of manufacturers\' shipments of specialty wire and cable totaled approximately $7.0 billion in 2004.

In certain circumstances, manufacturers of specialty wire and cable sell their products directly to the end-user. These transactions typically consist of a bulk volume of wire and cable, involve little or no customized services and may require long lead times between order and delivery. An example of this type of transaction would be the purchase of full reels of cable with manufacturing lead times ranging from 8 to 16 weeks after receipt of the order.

More frequently, an electrical distributor serves as the sales channel directly between the manufacturer and the contractor or end-user. The typical sale by an electrical distributor may involve a commonly purchased item that is specifically designated by the end-user and shipped from stock along with a variety of other electrical products. It is generally most economical for electrical distributors to carry in their inventories only those wire and cable SKUs that are commonly ordered and do not require high levels of specialized knowledge or services.

The Company distributes a wide array of wire and cable types for a host of applications, including continuous armor, control and power, electronic, flexible and portable cord, instrumentation and thermocouple, interlocked armor, lead and high temperature, medium voltage, and premise & category wiring.

The Company also sells its own private branded products, LifeGuard, DataGuard and Houwire, across many of the product categories identified above.

LifeGuard cable is a low-smoke, zero-halogen cable constructed with highly engineered polymers. LifeGuard\'s properties exceed those of standard cable construction, and it has excellent electrical and mechanical characteristics. The jacket on LifeGuard cable is highly flame-retardant, produces very small amounts of smoke when burned and contains no halogens. LifeGuard is used in harsh environments for power, control and lighting circuits in a broad range of commercial, industrial and utility applications.

The Company introduced its DataGuard product line in 2005 to address the data and communications wire and cable market. These expansive and performance driven markets require cables with exacting electrical characteristics. The Company’s DataGuard products are premium quality, highly engineered cables specifically designed to meet these demanding requirements and are used in a broad range of audio, control, instrumentation and computer applications.

The Company’s Houwire product line has been custom tailored for the sound, security and fire alarm market. Houwire products are low-voltage cables that have been value engineered for multiple applications in both industrial plants and commercial facilities.

Cost of sales was $158.2 million in the year ended December 31, 2005, an increase of $26.8 million, or 20.4%, compared to cost of sales of $131.4 million in the year ended December 31, 2004.

Gross profit increased $14.4 million, or 34.9%, to $55.7 million in the year ended December 31, 2005 from $41.3 million in the year ended December 31, 2004.

Operating expenses were $33.6 million in the year ended December 31, 2005, an increase of $3.2 million, or 10.5%, compared to operating expenses of $30.4 million in the year ended December 31, 2004.