SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-9487
CORCOM, INC.
(Exact name of registrant as specified in its charter)
Illinois 36-2307626
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
844 E. Rockland Road, Libertyville, Illinois 60048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 680-7400
Not Applicable
Former name, former address and former fiscal year,
if changed since last report.
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practical date.
Common Stock, No Par Value--3,782,043 Shares as of May 3, 1996
Exhibit Index on Page 9
CORCOM, INC.
INDEX
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets--
March 30, 1996 (Unaudited) and
December 31, 1995
Consolidated Condensed Statements of Operations
(Unaudited)--For the Thirteen Weeks Ended
March 30, 1996 and April 1, 1995
Consolidated Condensed Statements of Cash Flows
(Unaudited)--For the Thirteen Weeks Ended
March 30, 1996 and April 1, 1995
Notes to Consolidated Condensed Financial
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit 10.1--Engagement Letter Agreement with
The Chicago Dearborn Company
Exhibit 11.1--Computation of Earnings per Share
Exhibit 27.1--Financial Data Schedule (EDGAR only)
PART I. FINANCIAL INFORMATION
CORCOM, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, except Share Data)
ASSETS March 30, December 31,
1996 1995
(Unaudited)
CURRENT ASSETS
Cash & cash equivalents $2,216 $ 887
Accounts receivable - net 5,031 5,157
Inventories - Note B 6,830 7,071
Other current assets 390 531
Total current assets 14,467 13,646
PROPERTY, PLANT AND EQUIPMENT--AT COST 17,014 16,810
Less allowances for depreciation and
amortization 13,281 13,062
3,733 3,748
Deferred Income Tax Asset, Net 300 0
TOTAL ASSETS $18,500 $17,394
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 54 $ 54
Accounts payable 1,425 1,023
Other accrued liabilities 1,191 1,690
Total current liabilities 2,670 2,767
LONG-TERM DEBT 148 162
STOCKHOLDERS' EQUITY
Common Stock, no par value; authorized
10,000,000 shares; issued - 3,773,543
shares in 1996 and 3,658,543 in 1995 13,985 13,942
Retained earnings 1,815 551
Accumulated exchange rate adjustments (118) (28)
15,682 14,465
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $18,500 $17,394
See notes to Consolidated Condensed Financial Statements.
CORCOM, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, except Share Data)
Thirteen Weeks Ended
March 30, 1996 April 1, 1995
Net sales $8,313 $6,920
Costs and expenses:
Cost of sales 5,130 4,464
Engineering expenses 311 298
Selling, administrative and other expenses 1,850 1,601
Interest expense 4 25
7,295 6,388
Earnings before income taxes 1,018 532
Income tax provision (benefit) (246) 26
Net earnings $1,264 $506
Average number of common
and common equivalent
shares outstanding 3,939,928 3,798,144
Net earnings per common and
common equivalent share-Note C $0.32 $0.13
Cash dividends have not been declared in the periods covered by these
statements.
See notes to Consolidated Condensed Financial Statements.
CORCOM, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
Thirteen Weeks Ended
March 30, 1996 April 1, 1995
OPERATING ACTIVITIES
Net cash flows from operating activities $1,513 $ 364
INVESTING ACTIVITIES
Additions to property, plant and equipment, net (213) (331)
FINANCING ACTIVITIES
Proceeds from borrowings under notes payable
and long-term debt 190
Stock options exercised 43 90
Repayments of notes payable and long-term debt (14) (46)
Change in cash overdraft (130)
TOTAL FINANCING ACTIVITIES 29 104
INCREASE IN CASH AND CASH EQUIVALENTS 1,329 137
Cash and cash equivalents at beginning of period 887 202
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,216 $339
See notes to Consolidated Condensed Financial Statements.
CORCOM, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the thirteen weeks
ended March 30, 1996 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Company's annual report on Form 10-K for the year ended December 31,
1995.
NOTE B--INVENTORIES
Major classes of the Company's inventories are as follows (in thousands):
March 30, 1996 December 31, 1995
Finished products $2,674 $3,033
Materials and work-in-process 4,156 4,038
$6,830 $7,071
NOTE C--EARNINGS PER SHARE
Net earnings per common and common equivalent share are based upon the
weighted average number of shares of common stock and common stock
equivalents (dilutive stock options) outstanding during each period.
NOTE D--INCOME TAXES
The provision for income taxes in 1996 as a percentage of earnings before
income taxes is less than the federal statutory rate due principally to the
effect of utilization of net operating loss carryovers and the reversal of a
portion of the valuation allowance established in prior years.
The components of the net deferred tax asset, tax effected, recognized in the
accompanying balance sheet as of March 30, 1996 are as follows (in thousands):
Deferred tax assets $3,428
Less valuation allowance (3,128)
Net deferred tax assets $ 300
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - First Quarter 1996 vs. First Quarter 1995
CORCOM's net sales for the first quarter of 1996 were $8,313,000, an increase
of 20.1% from the $6,920,000 reported for the first quarter of 1995. This
increase was the result of volume increases in the Company's North American
and European commercial filter businesses. North American revenue
represented over 70% of total revenue in the first quarter of 1996 and
was up 11.6% over the comparable number in 1995 as a result of the continued
strength of the overall electronics market. European sales, which represents
approximately 25% of total first quarter 1996 revenue, was up 57.1% in 1996
over 1995. This increase is attributable to the more stringent 1996 European
RFI/EMI testing regulations which went into effect January 1st of this year.
There were no appreciable price changes year to year.
Cost of sales for the current quarter improved to 61.7% of net sales compared
to 64.5% for the year ago period. Certain peso-based costs at the Company's
main manufacturing plant in Juarez, Mexico have increased year to year as a
result of the inflation in this currency over the past year. However this
cost increase has been more than offset by the contribution margin of the
increased sales volume in 1996. Since a portion of the Company's costs are
peso-based, the Company's manufacturing costs could rise further if the value
of the peso increases relative to the dollar, or if inflation in Mexico
escalates.
Engineering expenses, at $311,000 in the first quarter of 1996, were about the
same as the $298,000 reported in the first quarter of 1995. Selling,
administrative and other expenses rose in 1996 to $1,850,000 from the
$1,601,000 reported in the first quarter of 1995. The largest components of
this increase were higher commission expenses on the higher volume, and
increased incentive compensation costs on the higher level of earnings.
Interest expense in the first quarter of 1996 was $4,000, compared to $25,000
for the year ago period, the result of lower borrowings on the Company's line
of credit.
The Company's pre-tax earnings for the first quarter of 1996 were $1,018,000
as compared with $532,000 for the first quarter of 1995. The reasons for the
improvement are discussed above.
The Company recorded a net income tax credit of $246,000 in the first quarter
of 1996 as compared to a net income tax expense of $26,000 in the first
quarter of 1995. The principal component of the 1996 credit was a $300,000
reversal of part of the valuation allowance against the deferred tax asset
which existed as of December 31, 1995 related to existing tax net operating
loss (NOL) carryforwards. As the uncertainty of realizing the benefits of
these NOL's lessened after a profitable first quarter, the need to keep a
valuation allowance against the deferred tax asset lessened as well.
After tax, the Company's net earnings for the first quarter of 1996 were
$1,264,000 ($.32 per share). This compares to net earnings in the year ago
period of $506,000 ($.13 per share). The average number of common and common
equivalent shares outstanding as of March 30, 1996 were 3,939,928, an
increase of 141,784 from the 3,798,144 shares reported as of April 1, 1995.
The increase was the joint result the issuance of additional shares on
exercise of stock options by certain key employees over the past year, and
the dilutive effect of existing unexercised stock options.
Liquidity and Capital Resources
As of March 30, 1996, the company had cash reserves on hand of $2,216,000 as
compared to net borrowings of $478,000 as of April 1, 1995. In addition to
current cash reserves, the Company's loan agreement with American National
Bank and Trust Company of Chicago is still in place. This agreement is a one
year, unsecured line of credit with maximum borrowings of $4,000,000, or 80%
of eligible accounts receivable, whichever is less. Interest on this loan is
the Company's choice of either LIBOR plus one hundred fifty basis points, or
the Bank's prime rate. This agreement runs through December 31, 1996. There
were no borrowings against this agreement as of March 30, 1996.
The Company does not believe it will need to identify additional sources
of capital over the next year and feels that current cash reserves, cash
provided by operating activities, and the existing credit facility will be
sufficient to meet its operating needs and capital resource requirements.
PART II. OTHER INFORMATION
CORCOM, INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. Description
10.1 Engagement Letter Agreement with the Chicago
Dearborn Company
11.1 Computation of Earnings per share
27.1 Financial Data Schedule (EDGAR only)
(b) The Company did not file any reports on Form 8-K during the
thirteen week period ended March 30, 1996.
CORCOM, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Corcom, Inc.
Dated: May 7, 1996 /S/ Thomas J. Buns
By: Thomas J. Buns
Vice President and
Treasurer
(Principal Financial Officer)
EXHIBIT 10.1
ENGAGEMENT LETTER AGREEMENT BETWEEN CORCOM, INC. AND THE CHICAGO DEARBORN CO.
March 7, 1996
Mr. Werner E. Neuman
President
Corcom, Inc.
844 East Rockland Road
Libertyville, IL 60048-3375
Dear Mr. Neuman;
The Chicago Dearborn Company ("Chicago Dearborn") is pleased to set forth
the terms of this engagement letter agreement (the "Agreement") relating to
its retention for financial advisory services by Corcom, Inc. ("Corcom").
1. Description of Engagement. Chicago Dearborn agrees to act as the
exclusive financial advisor and agent for Corcom to provide financial
advisory and investment banking services in connection with a financial
evaluation of Corcom and a review of financial and strategic alternatives.
The terms of this Agreement shall extend from the date of this letter for a
period of twelve months thereafter, and may be extended on a quarter by
quarter basis by mutual written consent of the parties hereto, herein
referred to as the "Term".
2. Services to be Provided. In connection with its financial evaluation of
Corcom, a review of financial and strategic alternatives and a Transaction,
as defined herein, Chicago Dearborn will, or will stand ready to:
- Review the businesses, operations, and assets of Corcom;
- Analyze the historical and projected financial performance of
Corcom;
- Prepare an information package describing the business and
prospects of Corcom;
- Formulate a strategy for discussions and negotiations with
potential partners;
- Compile a list of potential partners and, at Corcom's request,
contact potential partners to present the opportunity and
distribute the information package;
- Coordinate and assist in due diligence meetings with potential
partners;
- Assist in the negotiations and execution of a definitive purchase
agreement pursuant to a Transaction, as defined herein;
- Render an opinion to the Board of Directors of Corcom, if requested,
as to the fairness of any Transaction, as defined herein, to the
shareholders of Corcom from a financial point of view, and
- Provide, as deemed appropriate by Chicago Dearborn, additional
financial advisory services related to a Transaction, as defined
herein.
3. Compensation. In consideration of Chicago Dearborn providing, or
standing ready to provide, the financial advisory services described in
paragraph 2 above, Corcom agrees to pay to Chicago Dearborn the following:
a. a non-refundable Retainer of $25,000 per quarter, due and payable
in advance, with the first quarter payable upon signing of this
Agreement, and with such Retainer to be credited against any
Financial Advisory Fee payable pursuant to paragraph 3b below, and
b. in the event there is a transaction or series of transactions
("Transaction") whereby, directly or indirectly, control or a material
interest in the stock or assets of Corcom is transferred for
consideration, including, without limitation, by means of a merger,
consolidation, sale of assets, sale of stock, stock or rights
offering, tender or exchange offer, leveraged buyout, the formation of
a joint venture or partnership, recapitalization, restructuring,
business combination or investment by another entity involving Corcom,
Corcom agrees to pay Chicago Dearborn a Financial Advisory Fee equal
to:
(i) $150,000 on the first $10.0 million of the Transaction Value,
as defined in paragraph 4 below, and
(ii) 1.50% of the Transaction Value, as defined in paragraph 4
below, in excess of $10.0 million.
c. If so requested by the Board of Directors of Corcom, Chicago
Dearborn shall render one or more opinions ("Opinions"), verbal or
written, regarding the terms of any proposed Transaction, from a
financial point of view. In such an event, Corcom will pay Chicago
Dearborn a one time opinion fee (the "Opinion Fee") of $100,000 in
cash upon delivery of the first of such Opinions. Corcom agrees that
(a) the Opinions shall be used solely by the Board of Directors of
Corcom, including any Committee thereof, in considering the terms of
the proposed Transaction and (b) Corcom shall not furnish the Opinions
or any summaries or excerpts thereof to any other person or persons or
use the Opinions for any other purpose without the prior written
approval of Chicago Dearborn; provided, however, that in any event,
Corcom is hereby authorized to use or introduce into evidence or
otherwise refer to the Opinions in connection with any litigation
relating to the proposed Transaction or as otherwise required, in the
reasonable judgement of counsel for Corcom, by law. Corcom also may,
in its discretion, publish or refer to the Opinions in any proxy
statement or otherwise in connection with the proposed Transaction, so
long as Chicago Dearborn gives its prior written consent to such
publication or reference, which consent shall not be unreasonably
withheld. The Opinion Fee shall be credited against the Financial
Advisory Fee payable under paragraph 3b above.
Subject to the provisions set forth in paragraph 11 herein, this Financial
Advisory Fee shall be payable in immediately available funds on the closing
date of a Transaction regardless of whether such closing occurs during the
Term or such Transaction is initiated during the Term and is closed within
nine months of the Term. Corcom's obligation to pay the Financial Advisory
Fee shall be contingent solely upon closing of a Transaction. The Financial
Advisory Fee shall not include any fees earned by Chicago Dearborn or others
for furnishing services other than as provided herein, such as fees payable
in connection with the placement or arrangement of any debt or equity
financing necessary to consummate a Transaction, or advisory unrelated to the
Transaction including, without limitation, advisory fees associated with any
divestitures of assets by Corcom following a Transaction.
4. Definition of Transaction Value. "Transaction Value" shall be defined
as the total consideration paid for the stock (including stock options or
stock issuable pursuant to stock options) or assets of Corcom and will be
the sum of all cash, the market value of any securities issued (if the
securities are not readily marketable, the market value will be established
at fair value or by mutual agreement) as consideration towards the purchase
of such stock or assets, the present value of (i) any non-compete payments
payable pursuant to a Transaction, (ii) any post-closing adjustments, (iii)
any contingent future payments (such amounts to be determined in good faith
negotiations between Corcom and Chicago Dearborn) using a discount rate of
10% per annum, and the unpaid principal amount of any funded-debt obligation
(debt for borrowed money including, without limitation, any interest-bearing
debt or capitalized lease obligation) of Corcom assumed or discharged
pursuant to a Transaction, or in the case of a purchase of stock of Corcom,
the amount of such obligations at the time of closing of a Transaction.
5. Expenses. In addition to the Financial Advisory Fee and Retainer
described in paragraph 3 above, Corcom agrees to promptly reimburse Chicago
Dearborn, upon request, for all reasonable travel and external legal fees
and other out-of-pocket expenses incurred in performing the financial
advisory services hereunder regardless of whether a Transaction is
consummated. Corcom will not reimburse out-of-pocket expenses in excess of
$20,000 without having granted its prior approval, provided such approval
will not be unreasonably withheld.
6. Indemnification. Corcom agrees to: (i) indemnify and hold harmless
Chicago Dearborn, its directors, officers, agents, employees, and any
individual(s) who may be deemed to control Chicago Dearborn (collectively
"Indemnified Persons") against all losses, claims, damages, penalties,
judgements, liabilities and expenses of every kind whatsoever (including,
without limitation, all reasonable expenses of litigation or preparation
therefor, including reasonable attorney's fees, whether or not an Indemnified
Person is a party thereto) (collectively, "Liabilities"), which any of the
Indemnified Persons may pay or incur arising out of or relating to this
Agreement or the Transaction; and (ii) expressly and irrevocably waive any
and all rights and objections which it may have against any Indemnified
Persons in respect of any Liabilities arising out of or relating to this
Agreement or the Transaction, except, in each case, to the extent that
such Liabilities arise primarily from an Indemnified Person's gross
negligence or willful misconduct.
Corcom further agrees not to settle any claim, litigation or proceeding
(whether or not any Indemnified Person is a perty thereto) relating to this
Agreement or Transaction without Chicago Dearborn's prior written consent
unless: (i) such settlement releases all the Indemnified Persons from any and
all Liabilities related to this Agreement or the Transaction; and (ii) the
entire settlement amount and all costs of settlement are born by Corcom.
An Indemnified Person shall have the right to employ his own counsel in any
suit, action or proceeding arising from the Agreement or the Transaction if
the Indemnified Person reasonably concludes, based on advice of counsel, that
a conflict of interest exists between Corcom and the Indemnified Person which
would materially impact the effective representation of the Indemnified
Person. In the event that the Indemnified Person concludes that such a
conflict of interest exists, the Indemnified Person shall have the right to:
(i) assume and direct the defense of such suit, action, or proceeding on his
own behalf; and (ii) to select counsel which will represent him in any such
action, suit or proceeding, and Corcom shall indemnify the Indemnified Person
for the reasonable legal fees and expenses of such counsel and other out-of-
pocket expenses reasonably incurred by the Indemnified Person.
7. Referral. Corcom acknowledges that, although The First National Bank of
Chicago (the "Bank") has referred Corcom to Chicago Dearborn, neither the
Bank nor any of its affiliates, officers, directors or employees shall have
any responsibility or liability of any kind whatsoever in connection with
the services rendered pursuant to this Agreement. Furthermore, Corcom
acknowledges that Chicago Dearborn is not an affiliate of the Bank.
8. Persons Entitled to Reliance. Corcom recognizes that Chicago Dearborn
has been retained only by the undersigned, and that its engagement of
Chicago Dearborn is not deemed to be on behalf of and is not intended to
confer rights upon any shareholder, owner or partner of Corcom or any other
person not a party hereto as against Chicago Dearborn or any of Chicago
Dearborn's affiliates, the respective directors, officers, agents and
employees of Chicago Dearborn's affiliates or each other person, if any,
controlling Chicago Dearborn or any of Chicago Dearborn's affiliates. Unless
otherwise expressly stated in an opinion letter issued by Chicago Dearborn
or otherwise expressly agreed to by Chicago Dearborn, no one other that
Corcom is authorized to rely upon this engagement of Chicago Dearborn or any
statements or conduct by Chicago Dearborn.
9. Cooperation. In connection with Chicago Dearborn's activities pursuant
to this Agreement, Corcom will cooperate with Chicago Dearborn and will, to
the extent possible, furnish Chicago Dearborn with all information and data
concerning the Transaction and Corcom which Chicago Dearborn deems
appropriate and will, to the extent possible, provide Chicago Dearborn with
access to Corcom's respective officers, directors, employees, financial
advisors, independent accountants and legal counsel. Corcom represents and
warrants that all information made available to Chicago Dearborn by Corcom
or contained in any filing by Corcom with any court or governmental
regulatory agency, commission or instrumentality with respect to any
Transaction will, at all times during the period of the engagement of Chicago
Dearborn hereunder, be complete and correct in all material respects and will
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which such statements are
made. Corcom further represents and warrants that any projections provided
by it to Chicago Dearborn will have been prepared in good faith and will be
based on assumptions which, in light of the circumstances under which they
are made, are reasonable. Corcom acknowledges and agrees that, in rendering
its services hereunder, Chicago Dearborn will be using and relying on
information provided by Corcom or information available from public sources
and other sources deemed reliable by Chicago Dearborn without independent
verification thereof by Chicago Dearborn or independent appraisal by
Chicago Dearborn. Chicago Dearborn does not assume responsibility for the
accuracy or completeness of any of this information regarding Corcom.
10. Confidentiality.
a. Chicago Dearborn agrees to keep confidential non-public
information which it receives from Corcom concerning Corcom and the
Transaction and to disclose that information only with the consent
of Corcom or as required by law or legal process.
b. Corcom agrees to keep confidential non-public information which
it receives from Chicago Dearborn (including, without limitation,
opinions and advice) and to disclose that information only with the
consent of Chicago Dearborn; provided that Corcom may disclose the
fact that it has retained Chicago Dearborn as an advisor, and as
required by regulation, law or legal process.
11. Termination. This agreement shall become effective upon Corcom's
acceptance of this letter. This Agreement may be terminated during the Term
by either Chicago Dearborn or Corcom giving thirty days prior written notice
of termination to the other. Neither termination of this Agreement nor
consummation of the Transaction contemplated herein shall affect i) any
compensation earned by Chicago Dearborn up to and including the date of
termination or consummation; ii) the reimbursement of expenses incurred by
Chicago Dearborn up to the date of termination or consummation; and iii)
paragraphs 3-12, inclusive, of this Agreement. If this Agreement is
terminated by Corcom or this Agreement is terminated by Chicago Dearborn
after a breach of the Agreement by Corcom or the Agreement's Term expires
without renewal, and if a Transaction is consummated during the period of
nine months following a termination for any of the three foregoing reasons,
then the Financial Advisory Fee in respect of such Transaction shall become
due and payable. Notwithstanding anything to the contrary contained herein,
Chicago Dearborn shall not be entitled to any Financial Advisory Fee pursuant
to this Agreement if Chicago Dearborn terminates this Agreement, other than
termination due to Corcom's breach of terms of this Agreement.
12. Miscellaneous
a. Corcom may not assign this Agreement. Chicago Dearborn may not
assign this Agreement to any party other than a related affiliate.
b. Corcom agrees that, upon consummation of a Transaction, Chicago
Dearborn has the right to publish a tombstone advertisement in
financial publications at its own expense describing its services
hereunder.
c. The Agreement represented by this letter shall be governed by
the laws of the State of Illinois.
Please confirm that the foregoing is in accordance with your understanding of
this Agreement by signing and returning to us a copy of this letter.
Very truly yours,
THE CHICAGO DEARBORN COMPANY
By: s/s William C. Steinmetz
William C. Steinmetz
Senior Managing Director
ACCEPTED AND AGREED:
CORCOM, INC.
By: s/s Werner E. Neuman
Title: President
Dated: 7 March, 1996
Exhibit 11.1
CORCOM, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(In Thousands, except Per Share Data)
Thirteen Weeks Ended
March 30, 1996 April 1, 1995
Net earnings per common
and common equivalent share:
Average shares outstanding 3,751 3,632
Additional shares assuming
exercise of dilutive stock
options-based on the treasury
stock method using average
market price 189 166
AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES 3,940 3,798
Net earnings $1,264 $ 506
Net earnings per common
and common equivalent share $ .32 $ .13
Net earnings per common
and common equivalent share-
assuming full dilution:
Average shares outstanding 3,751 3,632
Additional shares assuming
exercise of dilutive stock
options-based on the treasury
stock method using the period
end price if higher than the
average market price 189 176
FULLY-DILUTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES 3,940 3,808
Net earnings $1,264 $ 506
Net earnings per common
and common equivalent share $ .32 $ .13
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<LEGEND>
This schedule contains summary financial information extracted from the
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of operations and is qualified in its entirety by reference to such
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