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HOTS 08/2001

Issue: August 2001

By: Frank Bisbee


 

Featured Story

 


Everyone is asking "What's going on in the business world? When will it be all better again?" A year to a year and a half ago, United States' economy was flying high. The stock market was in fantasyland. Many investors threw common sense away and put on the rose-colored glasses. The Dot.com world was the sizzle, today it's just a fizzle.

The problem that we face is where and how do we replace the TRILLION$ we invested in smoke and mirrors. We talked with some very experienced investors, and one message was clear. There have always been good companies to invest in, and this is particularly true of the Cabling Industry. Companies that know how to make quality products and make money. Companies that know how to build and dominate their markets. Companies that know how to control costs. Those are the companies that will attract re-investment as the world searches for a safe haven to invest their future.

The small cabling companies with the shallow pockets, could not afford to wait and see. Most of the small outfits have already repositioned to control their costs and strengthened their capabilities to weather the storm and survive the famine. Force reduction was not as much of a priority as improved performance in sales, service, and manufacturing. Working harder was demanded and nothing else would do.

However, many large companies analyzed the numbers for a couple of quarters before the bad news set in. Plans were made, meetings were held and more plans were made and more meetings were held.

Some outfits are just praying that the drought will end soon. While, others are casting off the ballast to keep the balloon from crashing to earth. Some outfits are throwing out the very resources needed to re-float the balloon and they are accelerating the rate of the fall.

Some economists are saying we hit the bottom already, and bounced. Now, we are headed back down again, and the bottom is even lower. The "Pollyanna" approach is to forecast a really strong recovery after we hit the bottom for the second time. Some forecasters, who are wearing their dark glasses, are reminding us that we will never again see a period of financial recklessness in investments like the one we just went through. Well, maybe not "never", but it will be a long time. They also were heard to say, "Remember things are always darkest just before they go completely black".

Wall Street was apparently spooked by the news of massive layoffs and slumping sales. The "Street" fears consumers will slash spending and depress the economy even more as they shut their wallets. However, the cabling will continue. We just keep building more info-highway infrastructure. We have to. We have no other choice. Does anyone truly believe that E-Commerce and E-Business is a thing of the past?

Stocks tumbled as the bad news kept coming in. Lucent Technologies Inc. announced a stunning additional 20,000 job cuts. Then on Thursday, (7/27/01) the world's largest fiber-optics components maker, JDS Uniphase Corp., said sagging sales and massive write-downs forced them to slash more jobs, bringing their cuts to 16,000, leaving it with a workforce of 13,000.

Consumers get nervous when they see friends and neighbors losing jobs and they often cut their spending, in case the economic sickness strikes their own job.

Recession is a word that may be defined on a very individual basis, both personally and corporately. To quote my grandfather, "A recession is when the other guy loses his job, a depression is when I lose mine".

Perspective: 10 -12 years ago, the Japanese stock market was at 36,000. Today it's at 12,000. They have experienced several consecutive recessions and the wrath of the US auto industry fighting to take back its share.

July 27, 2001, shares in JDS Uniphase Corp. dropped more than 10 percent in one day after the world's largest maker of fiber-optic components reported a vast $50.6 billion annual loss that led a raft of analysts to cut revenue forecasts. JDS said that sagging sales and massive write-downs led to the $50.6 billion annual loss. It said it was writing down $38.7 billion in goodwill -- effectively admitting it paid too much for companies it acquired during the technology boom of recent years.

The annual loss by JDS is bigger than the gross national income of countries like Bangladesh or Hungary, and slightly smaller than that for New Zealand or the Czech Republic, according to World Bank figures for 1999. It is probably the biggest annual loss in North American corporate history.

Almost 130,000 telecommunications jobs have been eliminated in the first six months of 2001, according to recent reports. The auto industry runs a distant second at 87,609 jobs, followed by computers at 74,623.

Telecom-equipment makers are responsible for most of the job losses, while services have held up better, analysts say.

Technology has lost much of its mystique. The personal computer is in your face and it has become almost a commodity. The infrastructure, or cabling, or networking (that was a commodity for 50 years), is becoming recognized as a specialty sector, and not just a commodity. The educational curve on infrastructure is headed up as the information management world accepts the reality of the need for effective information highway systems. It's cool to have fast cars, but you must have good roads to get the best performance.

In the world of high technology, there is a substrata of high technology support, which is less than glamorous and arcane to most of the professional public. The black magic world of cabling has gone through almost 30 significant changes and improvements in the last decade.

"Can you top this?" has been the motto of the transmission media industry for the past decade. The information highway has passed all previous technology and capabilities by a factor of millions. Telecommunications and Teletype was the stable underpinning of communications for 50 years, and the speeds were relatively stable.

Today, we look in the wiring closet and we see some remnants of the old telecommunications cabling - dusty and gray, AND, … an explosion of colors and cables that remind you of psychedelic spaghetti on speed. There are many wiring closets that you can't even get into anymore. Where and when did all this new cable show up? All in the last decade or so. We had Cat 3 and Coax. Then we got Cat 3, Cat 4, and Cat 5. Then we got Level 5 and modified Cat 5, and Coax. Then we got Cat 5e version 1, then version 2, then version 3, …. version 12. THEN, we got Coax and Level 6. Now, we have Cat 3, Cat 4, Cat 5, Cat 5e versions 1 - 12, and Cat 5e, AND we have Cat 6 version 1, and then version 2, and then version 3… and then version 8, and don't forget Coax.

Now, lets add fiber optics, and alarm cable, and energy control systems, and more coax for the video. No damn wonder there is no room left in the closet. And just when you thought is was safe, the NEC (National Electrical Code -info from the source National Fire Protection Association) decides to stir the pot and adds a new requirement that we should remove all abandoned cable, not tagged for future use.

Guess what? The damn cabling is costing as much as the computers and the telephone systems put together. When we analyze the infrastructure game, we realize that the game is not over. Hell, it's not even half way over. The infrastructure is the nervous system of our world of commerce, and our social system. It cannot be ignored, or abandoned, or disregarded. Information is power and the transport of the information on the super highway is not negotiable. Hopefully we are finally getting the message.

The fiber optic hype about the bleak future of copper is fantasy. Copper is here to stay for a Looonnngg Time. In the jump to 1000 BaseT Ethernet or Gigabit speeds, we jumped to laser driven fiber optics only. The cheaper LED driven technologies for fiber cannot effectively go that fast. And it's almost impossible to retrofit to laser. Oopps! Guess some fiber guys forgot to mention that to the buyers. That's a lot of dark fiber that will never see the light. Copper is competitive in performance, and dominant in market share in the horizontal distribution cabling world. The cost difference is significantly lower than fiber is today, or what those fiber costs will be in the foreseeable future (5-10 years).



Copper is still King. Copper based datacom cabling is the predominant media for cabling. With speeds in excess of TEN BILLION Bits Per Second, the copper cabling is the least expensive cabling method available today and in the foreseeable future. The systems approach of matching connector to cable has moved to a new high point and the results are verifiable. Recently, we saw reports from a research group that claimed fiber optics was now installed in 24% of the cable to the desktop. I believe they need to check the batteries in their calculator. Next time, the total should read "2.4%". The leading cabling manufacturers are producing the best performance copper datacom cables ever seen. The manufacturers are continuing to surpass our wildest expectations with a family of cabling products which exceeds all previously established barriers of obsolescence. Just when we thought they couldn't make it any better, they did. We suggest you check out the new Limited Combustible CMP-50 datacom cable for plenum applications and use in Data Centers. There is a wide range of product pluses with this new type of cable and the extra fire safety aspect is significant. The R&D staff in the world of cabling infrastructure, have a saying," The improbable we do right away, the impossible will take 'till next week". A recent tour of the Anixter Communications Laboratory confirmed our findings.



Belden (Richmond, IN), DataTwist® Limited Combustible Cables (CMP-50) offer Next Generation Fire Safety and set new standards. Advances in information technology over the past decade have delivered tremendous benefits to society. However, a hidden hazard lurks in the accumulation and high concentration of cables with combustible insulation materials in the plenum spaces of buildings. Not only are human lives threatened, but also much more is at risk in terms of the value of the electronic equipment that those cables connect. That's why Belden is introducing new cables with the next generation of fire safety design. Belden's new DataTwist® 1585LC (CAT 5e) and DataTwistâ 1701LC (CAT 5e plus) cables comply with the Underwriters Laboratories "Limited Combustible" (CMP-50) listing. Network managers and building owners who choose these Limited Combustible cables get an extra measure of safety and fire protection. In addition, the fluoropolymer jacketing on these new DataTwist cables withstands the effects of heat and humidity resulting in outstanding electrical performance over the life of the installation.

DataTwist® 1585LC and 1701LC cables feature primary insulation and jacketing of 100% Teflon® FEP which means that they generate extremely low smoke in fire situations - 17 times less smoke than CMP cables! Low smoke generation could mean less panic during building evacuation or less damage to expensive electronic equipment, of particular importance in mission-critical facilities like data centers.

The DataTwist® cables are the easiest Limited Combustible cables on the market to identify with the printing directly on the jacket surface. Unlike some competitive offerings, no marker tape is necessary. Select Belden's DataTwist® 1585LC or 1701LC for your next installation requiring the best protection from fire. Another hot flash to go with this new family of products, these cables are 100% recyclable. These cables contain NO LEAD or other heavy metals. www.belden.com



Letter to the Editor: Dear Heard on the Street,

Regarding "When Laboratories Collide," in the July 2001 issue of Heard On The Street in www.wireville.com , UL (Underwriters Laboratories Inc.) applauds companies such as Anixter that believe the right way is the best way when it comes to verifying wire and cable. While it is true that some manufacturers seek a more expeditious route to performance verification, others, like Anixter, understand the importance of diminishing the risk of a performance failure. They understand that architects, consultants and LAN system designers are specifying products that allow structured cabling networks to perform today, as well as sustain the technologies of tomorrow. They understand that a thorough and stringent process of performance verification may add time to product development, but they also understand how important performance verification and product certification is in the long run.

Loring Knoblauch, UL's ninth president and CEO, has vowed to improve UL's customer responsiveness, to make UL's testing and certification services more nimble and efficient, while maintaining the integrity of UL's comprehensive test protocols. UL's wire and cable business sector is already making strides toward navigating customers through UL's stringent performance verification process. We've increased communication with our customers and are developing new procedures and programs with their needs in mind. Our work is rooted in the firm belief that all manufacturers want to make the right decision when it comes to verification for wire and cable.

Business and technology changes are constantly increasing demands on today's structured cabling networks. Network cabling is critical to the performance of data transmission products. And as we all know, tomorrow's networks are going to demand even more from cabling systems. For these reasons, UL has maintained and will continue to challenge manufacturers with a stringent verification process.

We commend Anixter and other UL customers who make the right decisions when selecting a third-party certification provider. Not only do companies like Anixter appreciate and recognize the confidence and integrity of a UL performance evaluation, they also recognize the emerging safety issues and potential long-term benefits of opting for a substantive approach to testing and verification.

Working for a safer world,

Steven Galan, Manager - Wire and Cable

Underwriters Laboratories Inc. www.ul.com



As BellSouth Corp. predicted, foreign currency losses dragged down its second quarter profits, despite growth in its broadband, data and wireless businesses. www.bellsouth.com



Production at the nation's factories, mines, and utilities fell 0.5 percent in June. The drop in May was 0.8 percent. These data mean industry production has declined in the United States for nine straight months, the longest downturn since the 1982 recession.



CommScope to Partner With Furukawa Electric to Acquire Interest in Lucent's Fiber Optic Cable Business as Part of Furukawa's Purchase of Lucent's Optical Fiber Business CommScope to Pay $650 Million in Transaction That Doubles Its Revenues, Combining #1 Maker of Coaxial Cable With a Leading Global Manufacturer Of Fiber Optic Cable Complementary Channel Access to Provide Customers With End-To-End Cable Solutions

CommScope, Inc. (Hickory N.C.) today announced that it will partner with Furukawa Electric Co., Ltd. of Japan (Tokyo) to acquire the Fiber Optic Cable business of Lucent Technologies, creating a leading global supplier of broadband communications cable by combining leaders in coaxial cable and fiber optic cable. The transaction will enhance CommScope's technology platform with key intellectual property and research and development, expand its channel access by adding complementary capabilities and provide it with a strategic position in fiber optic manufacturing. Under the terms of the transaction, CommScope and Furukawa will enter into two joint ventures, one for the fiber cable portion of Lucent's fiber optic business and one for the transmission fiber portion of the same business. CommScope will invest approximately $650 million for its ownership in the two joint ventures, which will be funded through the issuance of a combination of debt and equity. Based on CommScope's preliminary due diligence, management believes that this transaction will be accretive to CommScope's earnings in the first full year, excluding one-time, transition-related charges. "We are extremely pleased to partner with Furukawa to acquire these unique, high-quality assets, thereby combining the #1 global manufacturer of coaxial cable with one of the leading global manufacturers of fiber optic cable to create a preeminent broadband cable supplier," said Frank M. Drendel, Chairman and Chief Executive Officer of CommScope. "This transaction diversifies our product offerings while adding leading technology, and based on the last twelve months, would have more than doubled CommScope's revenues. This partnership will add fiber manufacturing capabilities to CommScope's existing cable products and distribution channels, and will be among the few producers of premium fiber cable in the world." Drendel added, "CommScope and Furukawa have both earned reputations for providing superior customer service, and we intend to work together diligently to serve Lucent's existing fiber optic cable customers. As CommScope has done with our coaxial, LAN and wireless cable businesses, we will focus on the evolving needs of current and new customers by providing state-of-the-art manufacturing, superior technical support, timely product delivery and dependable service." CommScope will own 51% of the fiber cable joint venture, which includes transmission fiber and cable manufacturing capabilities at a 2.9 million square foot facility in Norcross, Georgia, as well as facilities in Germany and Brazil and a joint venture in Russia. With a majority ownership in the fiber cable joint venture, CommScope expects to consolidate those operating results in its financial statements, which for the last twelve months would have more than doubled CommScope's revenues. In addition, the cable joint venture will acquire Lucent's 51% interest in Fitel, a joint venture between Lucent and Furukawa that produces high-performance loose tube cable. The fiber joint venture will be 49% owned by CommScope, with Furukawa owning a 51% interest, and is expected to be accounted for by CommScope using the equity method. The transmission fiber joint venture includes the Multimode Optical Fiber Center of Excellence in Sturbridge, Massachusetts, which develops and manufactures graded-index multimode optical fibers, as well as Litespec, a joint venture between Lucent and Sumitomo Electric Lightwave Corporation that manufactures single mode optical fiber. Drendel continued, "We're excited to jointly own and operate Lucent's state-of-the-art facilities, which will further enhance CommScope's world-class manufacturing capabilities and is expected to provide us with significant operating synergies through the experienced management teams and highly skilled workforce. We believe we will be able to drive efficiencies and save costs by sharing our respective manufacturing processes and techniques. We also look forward to building a strong partnership with the employees of Lucent's fiber optic cable businesses." Dr. Katsuhiko Okubo, Ph.D., Senior Managing Director of Furukawa said, "We are very pleased to join forces with CommScope in this exciting transaction and are confident in our ability to work together to serve our customers and maximize the value of our optic fiber and cable businesses." This transaction is part of a $2.75 billion purchase by Furukawa and Corning Inc. of Lucent's entire Optical Fiber Solutions Business, which includes the Optical Fiber and Cable business (including specialty and transmission); Fiber Optic Apparatus and Premises business; and Specialty Fiber Devices business. Drendel concluded, "While these are challenging times, we are confident that there are exceptional long-term opportunities in the global fiber optic and coaxial cable markets as applications for broadband communications continue to grow throughout the world. By purchasing world-class assets in the current pricing environment, we believe CommScope will be well positioned to benefit when market conditions improve." The transaction, which is subject to various regulatory approvals and other usual closing conditions, is expected to close by the end of September 2001. CIBC World Markets Corp. is serving as CommScope's financial advisor on the transaction and Fried, Frank, Harris, Shriver & Jacobson and Robinson, Bradshaw & Hinson are the Company's legal advisors. CommScope is the world's largest manufacturer of broadband coaxial cable for Hybrid Fiber Coaxial (HFC) applications and is a leading supplier of high-performance fiber optic and twisted pair cables for LAN, wireless and other communications applications. Visit CommScope at its web site, www.commscope.com



Indianapolis Indiana. July 5. Another nail in the coffin for fiber optic cable networks. The Ackerson Group, Chartered, a Washington, D.C. law firm, announced today that telecommunications giant MCI WorldCom was today ordered to stop a fiber optic cable installation project, and to remove its equipment and supplies. In a class action lawsuit by landowners, the court found that MCI WorldCom's fiber optic installation was a "willful trespass." The court cited earlier decisions in which the plaintiff and other landowners had already proven that they owned the land. The court order also quoted a document in which MCI WorldCom acknowledged that it had not been authorized to enter the plaintiffs' land. Fiber optic cables have come under increasing legal attacks in recent years. According to the landowners' attorneys, more than 50 class actions have been filed in the United States on behalf of landowners on pre-existing railroad, pipeline and utility rights of way, which often are preferred by telecom companies. In many cases courts have held that adjacent landowners own the land under railroads and other utilities, and only they can grant rights to fiber optic cable companies. MCI WorldCom, AT&T, Sprint and other telecom companies have paid railroads and utilities but have ignored the landowners. They now face hundreds of millions in damages, but even that pales in comparison to the billions of their wrongful profits from exploiting land that belongs to others.



Scientific-Atlanta Also Feeling Cable Pinch

Faring somewhat better on the earnings march was cable equipment provider Scientific-Atlanta Inc., which saw its net income rise 24 percent from a year earlier, to $73.4 million. www.sciatl.com



Analyst group says LAN telephony will consume PBX . According to Cahners In-Stat Group, LAN telephony is the future of enterprise voice.



CDT Announces Corporate Restructuring Initiatives;

Global Workforce Reduction to Total 15%

$20 Million Charge in Fourth Quarter for Goodwill Impairment, Headcount Reductions, Bad Debt and Inventory Write-Downs . Cable Design Technologies, (Pittsburgh, PA) announced restructuring initiatives implemented during the fourth fiscal quarter, including a workforce reduction of 600 people. This brings the total workforce reduction for the calendar year to over 900 people. These initiatives are in response to the challenging business conditions in the communications equipment marketplace, primarily central office, fiber optic and wireless products. The company expects to incur the following approximate pre-tax charges in the quarter:

  • $7.0 million, or $0.10 per fully diluted share, related to the workforce reduction;

  • $9.4 million, or $0.19 per fully diluted share, reflecting the impairment of goodwill for certain of its operations, whose current combined sales are approximately $17 million annually. These charges represent non-cash expenses, the majority of which are not deductible for tax purposes;

  • $3.6 million, or $0.05 per fully diluted share, reflecting higher than normal bad debt and inventory valuation adjustments, caused primarily by the current industry conditions

Due to the well publicized slowdown in the telecommunications industries, we are taking action to reduce costs and improve the profitability of our business. We started reducing our direct labor costs six months ago and recent initiatives are aimed at bringing our indirect cost structure in line with our expected sales. The reductions in workforce represent approximately $25 million in cost savings on an annualized basis,'' said Paul Olson, President and CEO of CDT.

Commenting on the fourth quarter, Olson stated, ``While our local area network facilities are running at higher capacity from their April lows, two of our facilities that target the central office marketplace have slowed enough to impact our top and bottom lines significantly. With the reduction of spending in the common carrier marketplace, particularly on central office and fiber optic products, our expectation is that the downturn could last into next year. As a result of these and certain other factors, sales for our fourth quarter ending July 31, 2001 are expected to be in the range of $160 to $165 million. Prior to the restructuring and the other charges described above, EPS is expected to be in the range of $0.07 to $0.12 per fully diluted share for the fourth quarter.

In view of the fact that the slowdown was caused specifically by a reduction in spending on communication data infrastructure, I would like to see a 10% investment tax credit and accelerated depreciation for any business installing a gigabit or higher infrastructure IT system. I believe that this would jump start this very important marketplace and get the industry on firm footing again.

"This is the first time in the history of our company that we have had to take a step backward. For a company with our growth and earnings track record, it has been an unpleasant decision to layoff good, hardworking people. We realize the difficulties our decisions will have on employees and their families, and we regret these unavoidable actions but unfortunately they are necessary.

Despite the challenging environment and the lack of visibility in the marketplace, we are confident that we have positioned ourselves to take advantage of future opportunities. Our manufacturing facilities, machinery, and research and development initiatives are at the most advanced levels in our company's history, due to our aggressive investment over the last 2 years. This will allow us to decrease our capital expenditures significantly next year. Additionally, we continued to strengthen the balance sheet by decreasing debt by more than $17 million in the fourth quarter and $30 million for fiscal year 2001 while investing almost $40 million in our business. We will continue monitoring industry developments and manage the business in the best interest of our shareholders. We have also identified specific strategic acquisitions that would be accretive based on current pricing and we are optimistic that we will execute on these opportunities in the coming six months. We are committed to strategically positioning CDT to capitalize on the inevitable continued build out of the high-speed communications infrastructure while maximizing our long-term growth and profits. To build a high-speed, broadband infrastructure capable of handling the convergence of voice, video and data, you need to have a gigabit-capable network. We believe that we are seeing signs that could imply the start of a turnaround in the local area network infrastructure marketplace, and we are poised to take advantage by leveraging our expertise in gigabit technologies."

Cable Design Technologies will announce its fourth quarter 2001 results in mid to late September and will provide an outlook for fiscal year 2002 at that time. Cable Design Technologies www.cdtc.com is a leading designer and manufacturer of high bandwidth network connectivity products, fiber optic cable and connectors, assemblies, components, computer interconnect cables for communication switching applications, and communication cable products used in wireless, central office and local loop applications. CDT also manufactures electronic data and signal transmission products that are used in automation and process control and specialty applications.



FONS Corporation,(Northboro, MA) a leading provider of fiber optic components and interconnect solutions has expanded its product offering of packaged passive optical components to include Optical Cassette Modules specifically designed to be compatible with high density fiber management systems. www.fons.com



Fluke's DSP-4000 series achieves ETL and UL verification.

The DSP-4000 series of LAN cabling-test instruments from Fluke Networks has received performance verification from both ETL Semko Labs and Underwriters Laboratories. www.fluke.com



The year 2000 was one of the best for many semiconductor companies, but 2001 is turning into one of the worst for some of these same semiconductor manufacturers.



Straightlinesupply.com. has launched a new line of Push-Pull Rods that assist installers in placing wire and cable above ceilings, through conduit, and behind walls and crawl spaces. Each set of Push-Pull Rods includes 4 non-metallic/non-conductive 5' rods that easily connect to create a 20' span with controlled flexibility. The kit includes 3 different accessories for attachment to the end of the pole - a pulling eye, a magnetic locator/retractor, and uniquely designed, self-directional "Grabit" hook. The rods and attachments come in a bright yellow, nylon carry bag for easy storage and portability. This unique Push-Pull Rod kit, priced at $92, is sold exclusively by www.straightlinesupply.com.



REGULATION & POLICY REVIEW - In Congress, things are currently quiet regarding the issue of forced telecom access. In spite of BOMA International' s efforts and expectations (and combined with the CLEC industry's efforts), no mandatory access bill has been introduced. But, things are constantly in flux, and there are rumblings that a bill may be introduced at some point. www.boma.org



STAKING A CLAIM in the growing converged network market, Cisco Systems today launched a new system aimed at helping service providers quickly deploy Internet services to a wide variety of devices.

Known as ASAP (Any Service, Any Port), the new architecture enables voice, data, fax, and wireless services over a single service provider network that uses Cisco's AS5000 gateway products. Service providers will thus be able to add VoIP (voice over IP) services to data networks, and vice versa.



CableLAN Products, Inc (Norfolk, MA), a leading distributor of premises and specialty copper and fiber cabling products, has delivered a large order of fiber optic cables to Calvert Cliffs Nuclear Power Plant (Maryland). CableLAN Products, Inc., is the exclusive distributor of Chromatic Technologies, Inc.'s www.drakausa.com fiber optic cables for nuclear power plants used for communication links, data networks, video broadcasting, and emergency system repairs.

"For this installation, CableLAN will be providing more than 5,000 feet of 48-fiber specialized fiber optic cable for use in a new instrumentation and control system at the power plant," states Jan Pirrong, president of CableLAN Products, Inc. "Chromatic Technologies, Inc., is the only fiber optic manufacturer to offer a line of ruggedized fiber optic cables produced under the Nuclear Regulatory Commission and Nuclear Quality Assurance guidelines," he adds.

"These cables are designed to meet certain requirements of the IEEE-383, the standard for cabling in nuclear facilities. More importantly, these cables are designed and built under the rigid quality assurance program, outlined in 10CFR50 Appendix B, dictated by government regulations," notes Pirrong. "The renewed interest in nuclear power plant licensing extensions and fiber optic as a viable media is creating many upgrades and additions in existing facilities, as well as in new construction," he notes.



CommScope, Inc. (Hickory, NC), a world leader in the manufacture of broadband and high-performance telecommunication cables, today announced second quarter results for the period ended June 30, 2001. Earnings for the current quarter, excluding charges related to impairment of certain assets, were $13.9 million, or $0.27 per diluted share compared to $0.42 per diluted share in the second quarter of 2000. Including these charges, net income for the current quarter was $6.0 million, or $0.11 per diluted share. Sales for the second quarter decreased 17% to $199.9 million, compared to $241.2 million in the second quarter of 2000. Revenues reflect the slowdown in telecommunications spending. Domestic sales were $156.0 million in the current quarter, compared to $180.5 million in the second quarter of 2000. International sales were $43.9 million in the current quarter, compared to $60.7 million in the same period last year. Orders booked in the current quarter were $156.2 million, down 47% from the $293.4 million booked in the second quarter of 2000. As previously stated, the Company has taken a number of steps to manage cost and has been evaluating all aspects of its business. As a result of its review, the Company recorded pretax charges of approximately $12.6 million, or approximately $0.15 per diluted share, net of tax, related to the impairment of certain assets. These adjustments include equipment charges and a write-down of the Kings Mountain facility, which was under construction. Equipment that was intended for the Kings Mountain facility is expected to be redeployed overseas. The write-off of an investment in an unconsolidated affiliate was also included in the charges. Chairman and Chief Executive Officer Frank M. Drendel said, "In light of the ongoing industry conditions, we have adjusted our manufacturing and staffing plans to align CommScope with the realities of the current market. Despite this challenging economic environment, we have maintained production flexibility and service capabilities, paid down more than $30 million in debt this year and have remained profitable. We believe that we have taken the right steps to position CommScope for long-term success." www.comscope.com



Graybar (St. Louis MO), the nationwide independent distributor of electrical and comm/data supplies and equipment, has announced it has taken advantage of current low interest rates to raise $100 million by issuing bonds.

The St. Louis based distributor issued the bonds July 2 through Prudential Capital Group said Chief Financial Officer Juanita H. Hinshaw. "Graybar is taking advantage of favorable interest rates to diversify its sources of funding and pay down current short term debt. The 7.49% rate with a 10-year term represents a very good opportunity for Graybar to position itself for further growth," said Hinshaw. "Graybar is two-thirds of the way through a major logistics initiative that increases the company's ability to fill customers' complete orders within 24 hours. The logistics network is designed around 16 large regional zone warehouses strategically placed around the country. Graybar is using these warehouses to replenish branch inventories and ship product to customers for next day delivery. Ten regional zones are open including the five designated national zones, which also stock less-commonly requested items enabling Graybar to fill its customers' needs most efficiently. Three more regional zone warehouses are scheduled to open this fall. Three warehouses will open in the first quarter 2002, completing the network and enabling Graybar to take full advantage of the efficiencies of the zone operations.

"The impact of our zone warehouses has been significant," stated Chairman, President and CEO Robert A. Reynolds. "Today, the warehouse shipments flowing through these ten zones are equivalent to the warehouse sales of 240 locations just a few years ago. The zone warehouses give us greater capacity to fill complete customer orders within 24 hours." www.graybar.com



The Fiber Optic Association now offers a free job listing service for the fiber optic industry. Companies recruiting personnel can post jobs on the FOA website at http://www.TheFOA.org. Listings available include hundreds of jobs in R&D, manufacturing, installation, sales and marketing. The listing is available to all, not just FOA members. The FOA is the professional society for those working in the fiber optic industry. Founded in 1995 as a non-profit organization, it has grown explosively since, just like the fiber optic industry! Today the FOA has over 7,000 members, of which over 5,000 have completed requirements for the CFOT (Certified Fiber Optic Technician) certification and advanced certifications. Over 50 training organizations, including independent trainers and colleges and universities, offer FOA certification as part of their training programs. For more information, see the FOA website at www.TheFOA.org.



Graybar has announced the move of its Grand Rapids and Kentwood Branches into a new 90,000 square foot facility in Walker, Michigan. Located at 2204 Turner Avenue, the new location in the greater Grand Rapids area opened on June 11. The facility boasts a 2,200 square foot counter and is located only a mile and a half from its previous Grand Rapids location. Gerald T. Blouin is the branch manager. www.graybar.com



The UFCN is a new support accessory for Cablofil wire cable tray that attaches to support posts in raised access floor installations. Its unique snap-on-and-bolt design makes installation quick and easy. The UFCN is a corrosion-resistant clamp that includes all bolts and nuts needed for attachment to both square and round support posts. The highly adjustable clamp will adapt to any under floor installation.

The UFCN is attached to Cablofil's patented FAS Profile. The patented FAS profile saves installation time by securing tray without nuts and bolts. The UFCN and FAS Profile attach to an under floor support post with ease, constructing a sturdy support for Cablofil cable tray. Another great labor saving product from Cablofil!

Cablofil wire cable tray is constructed of precision-engineered, high quality, welded steel wire. It will adapt to almost any configuration, enabling it to handle 90-degree turns, easily twist around obstructions and make multiple level changes. Cablofil cable tray is designed to save time and includes everything required to make installation effortless. A comprehensive range of accessories makes any project simple to complete.

For more information about the UFCN or Cablofil cable tray, call Cablofil at 800-658-4641, or visit the Internet at www.cablofil.com.



For Mission-Critical Connections, the KRONE® Patch claims to out-perform any patch cord in the marketplace today. It's particularly tough - able to stand up to the type of physical abuse associated with frequent network changes, and it transmits so well, that it is a clear-cut answer to critical device connection.

The features of this product include, but are not limited to:

  • Highly conductive, silver-plated, oxygen-free 23 gauge copper conductors - for maximum signal strength at the highest frequencies.

  • A unique patent-pending construction that is so clean, so well engineered that it deserves to be seen through the bright red transparent jacket.

  • A turbine-like cable pair separator that gives real meaning to the term "crush resistance".

  • A space-age Kevlar® strength member provides unbelievable quadrilateral stability.

  • An extra-long, extra-firm strain relief that totally eliminates kinking at the plug.

  • An abuse-resistant, injection-molded boot that locks-in the cable pairs.

www.kroneamericas.com



Graybar and IMAP Textron, the leader in cable management software solutions, announced an agreement whereby Graybar will actively market IMAP's docIT cable management software. docIT is a powerful cable management software solution that is designed for the management of data/telecomm information for labeling, testing and documenting. IMAP is part of the Textron Data Signal Voice network of businesses, now marketed under the brand name "Tempo." IMAP is a strategic business partner of Microsoft Visio and docIT cable management software is the only solution available on the market that complies with the proposed ANSI/TIA/EIA 606A standard. "Cable installation professionals recognize the time constraint and financial challenges of effectively managing a cabling environment," said Brian Julian, director of sales and marketing at IMAP Textron. "docIT provides a complete picture of the cabling infrastructure, allowing technicians to reduce discovery time, improve service and reduce costs."

"Many of our customers are looking for a reliable way to manage complex cable installations and be compliant with the new 606A standard," said Jeff Craig, enterprise market manager at Graybar. "docIT provides our contractor customers an extremely effective solution that transitions them to the consultant role, adds value to the job, builds loyalty with their customer base…and does so, at an affordable price," said Karl Griffith, director, reseller markets. docIT is the only tool that creates a relational blueprint of an infrastructure's ever changing network and telecommunication system. docIT provides unlimited tracking capabilities, manages all assets and users of the cabling infrastructure, generates detailed reports quickly and will allow installers to plan future projects. IMAP Textron also offers a money back guarantee on the product. IMAP, a division of Textron Inc., is located in Pleasant Hill, CA. www.imap.textron.com.



AT&T Touts Broadband Unit

As Ma Bell shines the spotlight on the one unit of the company that could be considered a bright spot -- AT&T Broadband -- potential suitors for the cable business are coming out of the woodwork, including cable giant AOL Time Warner Inc. and Walt Disney Co.



"Remote" workers in the United States are on the rise, and broadband access is facilitating the surge, according to one analysis. By 2005, 60 percent of the U.S. workforce is expected to be considered remote/telecommuters, which will present opportunities for service providers.



NECA proposes "Integrated Building Systems" division to CSI The National Electrical Contractors Association (NECA) is proposing that the Construction Specifications Institute (CSI) incorporate an "Integrated Building Systems" specification into the next issue of the MasterFormat. This proposal smacks of the fox guarding the henhouse. Already several strong notes of protest have surfaced. The proposal is highly restrictive and only opens the jobs to members of NECA or IBEW. On the surface it sounds good, but is it really? www.neca.org



Graybar announces the move of its Burnsville, Minnesota, Branch to a new, more strategically located facility that will provide more convenient access for its customers. The new Burnsville location features a 2,100 square foot counter area that allows Graybar to add more breadth and depth of stock for its local customers. Located at 670 East Travelers Trail, Suite 100, the new Burnsville Branch opened July 1. Frank P. Nelson is the branch supervisor. www.graybar.com.



Corning Inc. and Alcatel will slash a combined 3,500 employees from their staff rosters as the economic and industry slowdown continues. www.corning.com



Struggling telecommunications equipment provider Lucent Technologies Inc. is reorganizing its five major business units into two -- the move is an extension of the company's ongoing restructuring efforts. www.lucent.com



Anixter invites you to review the 2001 Anixter Award for excellence in data cabling. The Anixter Award is an annual international competition recognizing companies that have recently met a networking challenge by installing an outstanding network infrastructure.

With new convergent network designs and bandwidth-hungry applications, data traffic is increasing exponentially. Having a network infrastructure that can handle those performance requirements is essential. The Award is proof that your data cabling is ready for tomorrow's network demands. All completed Anixter Award entries will be considered, and finalists will be reviewed in detail by a distinguished panel of industry experts. To qualify for consideration, the installation must have been installed after July 15th 2000. Once an entry has been selected as a finalist, more information will be required for verification, including on-site performance testing. Entries not selected will receive notification. Winners will be held up as an example for other companies to follow.

All entries must have been received (not postmarked) by the final deadline, July 15, 2001. No extensions granted. Anixter will donate $5,000 in the winner's name to a charity of the winner's choice. The award winner will be announced in a special presentation ceremony on September 15th, 2001. www.anixter.com



Rittal announced several changes to its key management structure. The changes, according to the company, are in direct response to health issues related to Rittal president, Hans J. Wagner.

Effective August 1, 2001, Wagner will "transition his duties as president to Michael Beyer." Beyer moved to Rittal in July from Avery Dennison's Machine Systems Division, where he was president and GM. Wagner will remain on the Board of Directors and has entered into an agreement to consult with the company. The following promotions/additions were also announced with the change at the helm:

Peter B. Kokuzian to senior VP, sales & marketing. Kokuzian joined Rittal just over a year ago after serving in executive roles with Panduit Corp. and Schneider Electric. James B. Hirt to senior VP, operations. Hirt will oversee Rittal's extensive capacity expansion plans throughout its three U.S. plants. David W. Watson joined as senior VP, finance & administration. Watson brings with him a background of manufacturing organizations and cost accounting. www.rittal.com



Breaking with the Past by Mike Byers (Anixter)

www.imakenews.com/informationserver

A Different and Complete Perspective

The Anixter Levels Lab®, as part of it's ongoing research and development of the Levels XP™ program, has been examining how different grades of cabling system products interact with different software programs or applications. The Levels Lab is able to replicate functions we do everyday, from opening an attachment in Lotus notes to creating a sales order in SAP, and then measuring how effective that cabling system is in transporting data and how long the transfer takes.

Windows File Transfer

To show the effect that cabling plays in networked applications, the Lab simulated a file transfer between two computers. To establish a baseline, a Level 7, 7-foot patch cord was used to connect the two computers. The baseline throughput averaged approximately 73 megabits per second. Next, in place of the patchcord, a Category 5e channel was used to connect the two computers. The channel simulated worst-case operating environments where temperature is poorly regulated. The system timed out, causing the data transfer to cease. Throughput average was zero. Finally, the Category 5e system was replaced with a Level 7 XP system. The Level 7 XP system exhibited throughput similar to that of the baseline-71 Mbps.

Lotus Notes

Each of us sends or receives many e-mails throughout the workday and many of these electronic messages contain attachments. Cabling can determine whether opening an attachment in Lotus Notes occurs quickly or slowly. Once again, a Level 7, 7-foot patch cord was used for the baseline. The throughput of the baseline measured approximately 41 Mbps. Next, the baseline was replaced with a Category 5e channel. The Category 5e channel experienced greatly diminished throughput capacity over the baseline. Finally, when a Level 7 XP channel opened the Lotus Notes attachment, the throughput graph showed the same results as the baseline-41 megabits per second.

SAP

The last test performed involved the creation of a sales order, using SAP enterprise software. Obviously, sales orders are important to companies. Therefore, throughput during this process is extremely important. The baseline showed an average of 26 Mbps throughput. After swapping the baseline 7-foot patch cord for a Category 5e system, throughput diminished to 19 Mbps. And finally, replacing the Category 5e system with Level 7 XP restored throughput back to levels consistent with the baseline.

The application tests performed in the Levels Lab illustrate how critical choosing the best cabling system is to running real-world applications. ACR, crosstalk, attenuation, etc, are good things to know, but most importantly, knowing how a cabling system will interface with your suite of software applications will ensure that you get the most efficient and reliable network possible.

www.anixter.com

 

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