Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

This report contains forward-looking statements. These statements relate to future events or the Company's future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "except," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company, nor any other person, assumes responsibility for the accuracy and completeness of the forward-looking statements. The Company is under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report on Form 10-Q to conform such statements to actual results or to changes in its expectations.

The following discussion should be read in conjunction with the Company's financial statements and the related notes and other financial information appearing elsewhere in this Form 10-Q. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company's business, including without limitation the disclosures made under the caption "Management's Discussion and Analysis and Plan of Operation," under the caption "Risk Factors," and the audited financial statements and related notes included in the Company's Annual Report filed on Form 10-K for the year ended October 31, 2011 and other reports and filings made with the Securities and Exchange Commission.

Critical Accounting Policies

The unaudited condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). One of the accounting policies that involves significant judgments and estimates concerns our inventory valuation. Inventories are valued at the weighted average cost value. Certain items in the inventory may be considered obsolete or excess and, as such, we establish an allowance to reduce the carrying value of these items to their net realizable value. Based on estimates, assumptions and judgments made from the information available at the time, we determine the amounts of these allowances. Because inventories have, during the past few years, represented up to one-third of our total assets, any reduction in the value of our inventories would require us to take write-offs that would affect our net worth and future earnings.

Another accounting policy that involves significant judgments and estimates is our accounts receivable allowance valuation. The Company routinely assesses the financial strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately provide for credit losses.

Another accounting policy that involves significant judgments and estimates is management's assessment of its non-amortizable intangible asset for impairment. We review our non-amortizable intangible asset for impairment annually in the fourth quarter at the reporting unit level. Each quarter, we also analyze whether any indicators of impairment exist.

Another accounting policy that involves significant judgments and estimates is management's assessment of goodwill for impairment. We review our goodwill for impairment annually in the fourth quarter at the reporting unit level. Each quarter, we also analyze whether any indicators of impairment exist.

The Company uses the Black-Scholes model to value the stock option grants which involves significant judgments and estimates.

Overview

The Company markets connectors, cables and related products to numerous industries for use in thousands of products, primarily for the wireless marketplace. In addition, to a limited extent, the Company also provides optical cable installation services on a regional basis from its New York subsidiary. Until the end of fiscal 2010, over 85% of the Company's sales were historically generated by its RF Cable and Connector segment that designs, manufactures and distributes RF coaxial connectors and cable assemblies. On June 15, 2011, the Company acquired Cables Unlimited, Inc., a company based in Long Island, New York that manufactures fiber optic and power cable products. As a result of the acquisition of Cables Unlimited, the RF Cable and Connector segment's percentage of the Company's overall net sales decreased to 53% for the nine-month period ended July 31, 2012; Cables Unlimited contributed 30% of the Company's total net sales during the same nine-month period. In June 2012, Cables Unlimited introduced its new OptiFlexTM Hybrid Custom Fiber Optic & DC Power Cabling solution, for which it has received substantial orders for deliveries to major wireless carriers. As a result of the introduction of this new product, Cables Unlimited's percentage of the Company's overall net sales is expected to increase in the coming year. The two other segments of the Company include the Medical Cabling and Interconnect segment (consisting of the Bioconnect division), and the RF Wireless segment (consisting of the RadioMobile and RF Neulink divisions). The Medical Cabling and Interconnect segment and the RF Wireless segment contributed 10% and 7%, respectively, to the Company's net sales for the nine-month period ended July 31, 2012. In November 2011, RadioMobile Division was awarded a $2.6 million contract from the Los Angeles County Fire Department for the implementation of a wireless system upgrade to the County Fire Department's existing remote communications equipment. A majority of the Los Angeles County contract is expected to be delivered and installed in the two fiscal quarters following July 31, 2012. Accordingly, the percentage of the Company's net sales contributed by RF Wireless during the next two fiscal quarters is expected to significantly increase.

Liquidity and Capital Resources

Management believes that existing current assets and the amount of cash it anticipates it will generate from current operations will be sufficient to fund the anticipated liquidity and capital resource needs of the Company for at least twelve months. The Company does not, however, currently have any commercial banking arrangements providing for loans, credit facilities or similar arrangements should the Company need to obtain additional capital. Management's beliefs that its existing assets and the cash expected to be generated from operations will be sufficient during the current fiscal year are based on the following:

· As of July 31, 2012, the amount of cash and cash equivalents was equal to $5,630,000 in the aggregate.

· As of July 31, 2012, the Company had $16,731,000 in current assets, and $3,012,000 in current liabilities.

· As of July 31, 2012, the Company had no outstanding indebtedness (other than accounts payable and accrued expenses).

The Company does not anticipate needing material additional capital equipment in the next twelve months. No additional capital equipment purchases have been currently identified that would require significant additional leasing or capital expenditures during the next twelve months. Management also believes that based on the Company's current financial condition, the absence of outstanding bank debt and recent operating results, the Company would be able to obtain bank loans to finance its expansion, if necessary, although there can be no assurance any bank loan would be obtainable or, if obtained, would be on favorable terms or conditions.

As of July 31, 2012, the Company had a total of $5,630,000 of cash and cash equivalents, which included cash it holds as a result of the maturity of all of its certificates of deposit. As of October 31, 2011, the Company had $1,760,816 of cash and cash equivalents and $4,094,724 of certificates of deposit. At the end of the nine-month period ended July 31, 2012, the Company had working capital of $13,719,919 and a current ratio of approximately 6:1. The sum of cash and cash held on July 31, 2012 increased from the amounts held on October 31, 2011 due primarily to maturities of $4,094,724 certificates of deposit, which funds have not yet been re-invested in new certificates of deposit or other similar investments. This increase in cash was partially offset by (i) $502,830 of capital expenditures, (ii) $1,038,408 of dividends paid by the Company during the nine-month period endedJuly 31, 2012, and (iii) the repurchase of $1,143,243 of the Company's common stock during the most recent nine-month period. During the three months ended July 31, 2012, the Company wrote off $1,108,655 of fully depreciated equipment and tooling and furnitures and fixtures, which wereoriginally purchased and capitalized prior to fiscal 2005. Management determined these assets to be of no futher use to the Company. The net fixed asset balance was unaffected by these write-offs.

The Company recognized net income of $1,454,846 for the nine months ended July 31, 2012 and had $2,249,949 of cash provided by operating activities. Cash from operations was greater than net income primarily due to an increase in outstanding accounts payable and income taxes payable. During the nine months ended July 31, 2012, the Company had an increase of $554,115 in accounts receivable, used $566,568 for the purchase of inventory, and used $106,420 for prepaid expenses and inventory deposits. These outlays were partially offset by a decrease of $572,642 in prepaid income taxes, increased accounts payable of $660,874,and increased accrued expenses of $111,450, which resulted in cash provided by operating activities of $2,249,949 during the nine months ended July 31, 2012. The Company increased its inventory purchases because of increased sales and because it received volume discounts from some of its inventory vendors.

The Company received proceeds of $4,094,724 from the maturity of its certificates of deposit and spent $502,830 on capital expenditures during the nine months ended July 31, 2012. Net cash used in financing activities decreased cash by $1,972,659 due primarily to the repurchase of $1,143,243 of the Company's common stock and dividends paid of $1,038,408, which was partially offset by the receipt of $141,340 from the exercise of stock options and $73,133 of excess tax benefits from stock-based compensation during the nine months ended July 31, 2012.

Trade accounts receivable (net of allowances for doubtful accounts) at July 31, 2012 increased approximately 20%, or $534,142 to $3,140,107 compared to the October 31, 2011 balance of $2,605,965 because of the 46% increase in net sales during the nine months ended July 31, 2012.

Inventories at July 31, 2012 increased by 9%, or $566,568 to $6,756,169 compared to $6,189,601 at October 31, 2011. The increase in inventories reflects the increase in inventory purchases due to actual and anticipated sales increases.

Other current assets, including prepaid expenses and deposits increased by 16%, or $82,619 to $594,451 compared to $511,832 at October 31, 2011 and relate primarily to charges incurred on prepaid insurance and software maintenance contracts, advertising, rent, and inventory purchases.

Accounts payable combined with accrued expenses at July 31, 2012 increased $772,043 to $2,872,662 from $2,100,619 on October 31, 2011. The primary reason for the increase is attributable to an increase in inventory related purchases in accounts payable at July 31, 2012 compared to October 31, 2011. Of this increase in payables and accrued liabilities, $719,772 relates to the Cables Unlimited segment and is again due to the significant increase in sales during the three month period ended July 31, 2012 when compared to the comparable period of the prior fiscal year for this operating unit.

The above cash flow changes are net of the effects of the deconsolidation of K&K Unlimited, LLC, which was completed in the first quarter of the current fiscal year.

Results of Operations

Three Months Ended July 31, 2012 vs. Three Months Ended July 31, 2011

Net sales in the fiscal quarter ended July 31, 2012, increased 51% or $2,524,660 to $7,472,413from $4,947,753 in the comparable fiscal quarter of prior year due to an increase in sales at all four of the Company's segments. The largest contributor to the increase in net sales was Cables Unlimited. Since Cables Unlimited was acquired on June 15, 2011, the three month period ended July 31, 2011 included only six weeks of Cables Unlimited sales. Sales recognized from Cables Unlimited also increased as a result of the new sales generated by that subsidiary from the sale of its new OptiFlexTMHybrid Custom Fiber Optic & DC Power Cabling solution that was commercially released in June 2012. As a result of both the longer period of operations and the increased sales from the OptiFlexTM Hybrid Custom Fiber Optic & DC Power Cabling solution sales of the Cables Unlimited segment increased by $1,818,514 to $2,727,791 in the three month period ended July 31, 2012 compared with sales of $909,277 of the prior year comparable period. Sales of the RF Connector and Cable segment increased by 18% or $597,667 from the prior year's comparable period ended July 31, 2011 due to increases in sales at all three of that segment's divisions. As a result of the Company's continued success in marketing its larger selection of medical cabling products, sales of the Medical Cabling and Interconnect segment increased by 12% or $60,241 from the prior year comparable period. Sales of the RF Wireless segment increased by 19% or $49,238 compared to the three month period ended July, 2011 due in part to revenues recognized relating to the $2.6 million LA County Fire Department contract that the RF Wireless segment received in November 2011, as well as increased sales of RF Neulink wireless products. Most of the revenues from the Los Angeles County Fire Department contract are expected to be recognized in the last remaining quarter of the current fiscal year and in the first fiscal quarter of the next fiscal year. As a result of increased sales at all three of the Company's segments and the addition of the Cables Unlimited business, the percentage of total sales generated by the RF Connector and Cable assembly segment decreased to 52% of total sales in the three month period ended July 31, 2012, from 66% of total sales in the comparable quarter of prior year.

Domestic sales increased significantly by $2,470,344 to $7,064,430 from $4,594,086 in the comparable period of the prior fiscal year, primarily due to the addition of Cables Unlimited and its sales of its new fiber optic cable assemblies. Foreign sales during the fiscal quarter ended July 31, 2012 increased to $407,983 compared to foreign sales of $353,667 during the fiscal quarter ended July 31, 2011, due to an increase in cable assembly sales to two Cables Unlimited segment customers located in Canada. Foreign sales represented approximately 5% and 7% of the Company's net sales during the fiscal quarters ended July 31, 2012 and 2011, respectively.

The Company's gross profit as a percentage of sales decreased to 45% during the current fiscal quarter ended July 31, 2012 compared to 49% in the comparable quarter of prior fiscal year. The decrease in the Company's gross profit percentage reflects the impact of lower margins at the Cables Unlimited segment (which contributed 37% of net sales during the current fiscal quarter ended July 31, 2012 compared to 18% in the same quarter last year).Before its acquisition, Cables Unlimited had historically operated at an average gross margin of 32%. Since its acquisition and subsequent business improvements being implemented, this segment has averaged a gross margin of approximately 34%. The gross margins at the Company's RF Cable and Connector division were 54%, which is approximately the gross margin it has previously maintained. However, because third quarter fiscal 2012 sales at Cables Unlimited grew to 37% of total Company sales compared to 18% of net sales last year, the Company's overall gross margin percentage was negatively impacted. Furthermore, the gross profit margin of the Medical Cabling and Interconnector segment decreased by 2% to 39% compared to 41% in the comparable fiscal quarter of prior year due to rising costs of certain of its raw materials. Also, the gross margin of the RF Wireless segment decreased 13% to 26% compared to 39% in the comparable fiscal quarter of prior year due primarily to delays on shipment of product relating to the LA County Fire Department contract.

Engineering expenses decreased 5%, or $12,834, to $261,322 from $274,156 in the comparable quarter of fiscal 2011 due to the fact that research and development efforts have slightly decreased as projects in prior years have been completed and current projects are not incurring a comparable rate of charges.

Despite the 51% increase in net sales, selling and general expenses decreased 7% or $142,919 in the current fiscal quarter ended July 31, 2012 to $1,998,349 from $2,141,268 in the comparable quarter of the prior fiscal year. The decrease in selling and general expenses compared to these expenses last year was due primarily to the fact that selling and general expenses in the 2011 period were significantly increased by one-time charges related to (i) the acquisition of Cables Unlimited (such as investment banker fees, additional legal fees, additional accounting and audit fees, appraiser fees, and other travel costs), and (ii) additional professional fees in evaluating and responding to requests made by one of the Company's larger shareholders. No such expenses were incurred in the fiscal quarter ended July 31, 2012.

As a result of the significant increase in net sales and a slight decrease in selling and general expenses, income before the provision (benefit) for income taxes during the three months ended July 31, 2012 increased by $1,103,357 to $1,104,979 from $1,622 in the three months ended July 31, 2011.

The provision (benefit) for income taxes during the third quarter of fiscal 2012 was $369,693, representing an effective tax rate of 33%. During the comparable fiscal quarter last year, the Company realized a tax benefit of $63,072 due to the Company's recognition of one-time tax benefits. The Company recognized approximately $137,000 of net tax benefits for uncertain tax positions where the statute of limitations expired during the three month period ended July 31, 2011. Also, the Company received state tax refunds totaling $73,246 during the three month period ended July 31, 2011. The Company did recognize an additional $79,223 for uncertain tax positions where the statute of limitations expired during the three month period ended July 31, 2012.

With the significant increase of $2,524,660 in net sales in the third quarter of fiscal 2012, gross profit increased by $938,288 from the comparable quarter of fiscal 2011. As a result, the Company's operating income for the three months ended July 31, 2012 increased by $1,094,041 to $1,094,166 compared to $125 for the three months ended July 31, 2011. The third quarter of fiscal 2011 included significant Cables Unlimited related acquisition expenses, which resulted in minimal operating income. As such, consolidated net income for the three months ended July 31, 2012 was $735,286 compared to$64,694 in the comparable period of the prior fiscal year.

Nine Months Ended July 31, 2012 vs. Nine Months Ended July 31, 2010

Net sales in the nine month period ended July 31, 2012 increased significantly by $6,223,744 to $19,703,354 from $13,479,610 in the comparable period of the prior fiscal year due to an increase in sales at all four of the Company's segments. Sales of the Cables Unlimited segment contributed $6,007,569 to total Company sales for the nine months ended July 31, 2012 compared to $909,277 for the comparable period of the prior fiscal year. During the nine-month period of fiscal 2011, the Company owned Cables Unlimited for only six weeks, which resulted in the comparatively smaller revenue contribution by that new subsidiary. Although the addition of Cables Unlimited was the largest contributor to the increase in net sales for the current fiscal period, net sales also increased due to increased net sales at all of the Company's other operating segments. Sales of the Company's RF Connector and Cable segment increased by $247,046 compared to the comparable fiscal period in 2011. This increase was due to a $560,497 increase in sales at the Connector division, which was partially offset by decreases of $258,467 and $54,984 at the Aviel and Oddcables divisions, respectively. The Company is continuing recent increased efforts designed to improve sales at these underperforming divisions. Sales of the Medical Cabling and Interconnect segment increased by $203,164 from the prior period and sales at the RF Wireless segment increased by $675,242 from the prior comparable period ended July 31, 2011. Sales of the RF Wireless segment increased primarily due to revenues recognized under the LA County Fire Department contract to upgrade is wireless system that was awarded in November 2011, as well as a significant increase in sales of radio modems at the Neulink division.

Domestic sales increased significantly by $6,291,242 to $18,592,094 from $12,300,852 in the prior year comparable period, primarily due to the addition of Cables Unlimited and its sales of its new fiber optic cable assemblies. The domestic sales growth was partially offset by decreased foreign sales. Foreign sales during the nine months ended July 31, 2012 decreased by $67,498 to $1,111,260 compared to foreign sales of $1,178,758 during the nine months ended July 31, 2011 primarily due to a decrease in cable assembly sales to several major international customers in Canada and other various countries. Foreign sales represented approximately 6% and 9% of the Company's net sales during the nine months ended July 31, 2012 and 2011, respectively. The decrease in foreign sales in the current period as a percentage of overall sales is also due to the fact that substantially all of Cables Unlimited's customers are located in the United States, which has increased the overall percentage of domestic sales of the Company compared to the comparable period of prior year.

The Company's gross profit as a percentage of sales decreased 6% to 45% during the nine month period ended July 31, 2012 compared to 51% in the comparable nine month period of prior year. The decrease in the Company's gross profit percentage relates to the impact of the Cables Unlimited 35% gross margin on the overall Company gross margin for the nine month period ended July 31, 2012. Before its acquisition, Cables Unlimited had historically operated at a 32% gross margin. Since its acquisition and subsequent business improvements being implemented, this segment averaged a gross margin of approximately 35% during the nine months ended July 31, 2012. The gross margin of the RF Connector and Cable Assembly segment decreased by 2% to 52% from 54% in the comparable nine month period of prior year due to increased raw material costs and higher labor costs, while the gross profit margin of the Medical Cabling and Interconnector segment increased by 3% to 42% from 39% in the prior comparable period due to a higher volume of sales and its related effect on certain fixed costs of sales. The gross margin of the RF Wireless segment remained unchanged at 42% for the nine month period ended July 31, 2012 compared to the nine-month period ended July 31, 2011. As a result of increased sales and profits at the Cables Unlimited, Medical Cabling and Interconnector, and RF Wireless segments, sales of the RF Connector and Cable assembly segment accounted for only 61% of the Company's total gross profit margin in the current nine month period, compared to 81% of the Company's total sales in the comparable nine month period of prior year.

Engineering expenses decreased 8% or $68,528 to $835,084 from $903,612 in the comparable nine month period of the prior fiscal year due to the fact that research and development efforts have slightly decreased as projects in prior years have been completed and current projects are not incurring a comparable rate of charges.

Selling and general expenses increased 23% or $1,079,070 to $5,847,438 from $4,768,368 in the comparable nine month period of the prior fiscal year. The increase in selling and general expenses was primarily due to the addition of expenses incurred at the Cables Unlimited segment (the current period includes nine months of selling and general expenses incurred at our Cables Unlimited subsidiary compared to six weeks of such expenses during the nine-month period ended July 31, 2011.

The increase in net sales and the resulting increase in gross profits were partially offset by the increase in selling and general expenses. As a result, operating income during the nine months ended July 31, 2012 increased by 91% or $1,045,194 to $2,195,487 from $1,150,293 in the comparable nine month period of the prior fiscal year.

The provision for income taxes during the nine months ended July 31, 2012 was $776,477 (or a combined estimated Federal and state income tax rate of approximately 35%), compared to $350,337 in the nine months ended July 31, 2011 (or a combined estimated Federal and state income tax rate of approximately 30%). The increase in the effective income tax rate from period to period for the three months and the increase in the effective income tax rate from period to period for the nine months was primarily driven by the following: a decrease in the rate for a true-up of deductible acquisition costs treated as a discrete item in the three months ended April 30, 2012; an increase in the rate due to a decrease in the amount of research credits resulting from the expiration of the credits on December 31, 2011; an increase in the rate due to a true-up of research credits treated as a discrete item in the three months ended April 30, 2011; and a decrease in the rate due to the reversal of the unrecognized tax benefit treated as a discrete item in the three months ended July 31, 2012. The Company expects its effective tax rate for the current fiscal year to be approximately 42% absent these discrete items.

The significant increase in net sales in the nine months ended July 31, 2012 compared to prior year's nine month period was offset slightly by the decrease in gross margins resulting in a $2,055,736 increase in gross profit. As engineering expenses decreased by $68,528 and selling and general expenses increased by $1,079,070 from the prior comparable period, the Company's operating income for the nine months ended July 31, 2012 increased by $1,045,194 to $2,195,487 up from $1,150,293 in the comparable nine month period of the prior fiscal year. Consolidated net income for the nine months ended July 31, 2012 was$1,454,846 compared to $822,699 for the same period of the prior fiscal year.