SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter ended December 31, 1996.
Commission File Number 0-13627.
CTC COMMUNICATIONS CORP.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2731202
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
360 Second Avenue, Waltham, Massachusetts 02154
(Address of principal executive offices) (Zip Code)
(617) 466-8080
(Registrant's telephone number including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's
classes of Common Stock, as of the latest practicable date:
As of February 4, 1997, 9,611,429 shares of Common Stock,
par value $.01 per share, were outstanding.
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CTC COMMUNICATIONS CORP.
FORM 10-Q
INDEX
<TABLE>
<S> <C> <C> <C>
Part I FINANCIAL STATEMENTS PAGE NO.
Item 1. Financial Statements
Condensed Balance Sheets
as of December 31 and March 31, 1996 3
Condensed Statements of Income
Three Months Ended December 31, 1996 and 1995 4
Condensed Statements of Income
Nine Months Ended December 31, 1996 and 1995 5
Condensed Statements of Cash Flows
Nine Months Ended December 31, 1996 and 1995 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
Part II OTHER INFORMATION
Item 1. Legal Proceedings Inapplicable
Item 2. Changes in Securities 10
Item 3. Default Upon Senior Securities Inapplicable
Item 4. Submission of Matters to a
Vote of Security Holders Inapplicable
Item 5. Other Information Inapplicable
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
(3.1) Restated Articles of Organization,
as amended
(11) Statements Regarding Computation
of Per Share Earnings
Three Months and Nine Months ended
December 31, 1996 and 1995
</TABLE>
The Company did not file any reports on Form 8-K during the
three months ended December 31, 1996.
2
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CTC COMMUNICATIONS CORP.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1996 1996
--------------- --------------
ASSETS
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 4,661,663 $ 3,941,876
Accounts receivable, net 9,382,002 6,557,229
Inventories 1,600 25,190
Prepaid expenses and other current assets 692,785 365,699
------------- -------------
Total Current Assets $ 14,738,050 $ 10,889,994
Furniture, Fixtures and Equipment 6,706,987 6,046,493
Less accumulated depreciation (5,329,755) (4,822,755)
------------- -------------
Total Equipment 1,377,232 1,223,738
Deferred tax asset 277,000 277,000
Other assets 114,635 118,485
------------- -------------
Total Assets $ 16,506,917 $ 12,509,217
============= =============
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 1,378,874 $ 1,176,804
Accrued salaries and related taxes 2,163,466 1,828,288
Deferred revenue 6,352 9,302
Customer deposits 2,220 0
------------- -------------
Total Current Liabilities 3,550,912 3,014,394
Stockholders' Equity
Common stock 96,109 95,841
Additional paid in capital 4,703,888 4,644,988
Retained-earnings 8,291,833 4,889,819
------------- -------------
13,091,830 9,630,648
Amounts due from stockholders (135,825) (135,825)
------------- -------------
Total Stockholders' Equity 12,956,005 9,494,823
------------- -------------
Total Liabilities and
Stockholders' Equity $ 16,506,917 $ 12,509,217
============= =============
</TABLE>
The accompanying notes are an integral part of
these financial statements.
3
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CTC COMMUNICATIONS CORP.
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
December 31, December 31,
1996 1995
------------- -------------
Revenue
<S> <C> <C>
Network service commission income $ 7,265,608 $ 7,003,197
Resale product usage income 2,928,179 1,323,601
------------- -------------
10,193,787 8,326,798
Costs and expenses
Cost of resale product 2,261,625 1,049,858
Selling, general and administrative expenses 6,000,420 5,334,676
------------- -------------
8,262,045 6,384,534
------------- -------------
Income from operations 1,931,742 1,942,264
Other
Interest income 48,126 49,727
Interest expense (3,237) (34)
Other 2,369 43
------------- -------------
47,258 49,736
------------- -------------
Income before income taxes 1,979,000 1,992,000
Provision for income taxes 820,000 817,000
------------- -------------
Net income $ 1,159,000 $ 1,175,000
============= =============
Net income per common share
Primary $ 0.11 $ 0.11
============= =============
Fully diluted $ 0.11 $ 0.11
============= =============
Weighted average number of common shares
Primary 10,705,803 10,672,928
============= =============
Fully diluted 10,705,803 10,672,928
============= =============
</TABLE>
The accompanying notes are an integral part of
these financial statements.
4
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CTC COMMUNICATIONS CORP.
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Nine Months Ended
December 31, December 31,
1996 1995
------------- -------------
Revenue
<S> <C> <C>
Network service commission income $ 20,841,300 $ 19,759,276
Resale product usage income 7,977,015 3,668,316
------------- -------------
28,818,315 23,427,592
Costs and expenses
Cost of resale product 6,094,038 2,893,855
Selling, general and administrative expenses 17,057,826 15,920,994
------------- -------------
23,151,864 18,814,849
------------- -------------
Income from operations 5,666,451 4,612,743
Other
Interest income 133,632 117,299
Interest expense (9,643) (604)
Other 10,774 9,162
------------- -------------
134,763 125,857
------------- -------------
Income before income taxes 5,801,214 4,738,600
Provision for income taxes 2,399,200 1,925,850
------------- -------------
Net income $ 3,402,014 $ 2,812,750
============= =============
Net income per common share
Primary $ 0.31 $ 0.27
============= =============
Fully diluted $ 0.31 $ 0.27
============= =============
Weighted average number of common shares
Primary 10,836,112 10,487,978
============= =============
Fully diluted 10,851,605 10,529,669
============= =============
</TABLE>
The accompanying notes are an integral part of
these financial statements.
5
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CTC COMMUNICATIONS CORP.
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
December 31, December 31,
1996 1995
------------- -------------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 3,412,014 $ 2,812,750
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 507,000 439,000
Changes in noncash working capital items:
Accounts receivable (2,824,773) (2,375,672)
Inventories 23,590 10,322
Other current assets (327,086) (161,045)
Other assets 3,850 3,600
Accounts payable 202,070 434,980
Accrued liabilities 335,178 843,352
Accrued taxes 0 (372,494)
Deferred revenue (2,950) 0
Customer deposits 2,220 0
------------- -------------
Net cash provided by operating activities 1,321,113 1,634,793
INVESTING ACTIVITIES
Additions to equipment (660,494) (377,810)
------------- -------------
Net cash used in investing activities (660,494) (377,810)
FINANCING ACTIVITIES
Proceeds from the issuance of common stock 59,168 71,217
Dividends Paid 0 (840)
------------- -------------
Net cash used by financing activities 59,168 70,377
Increase in cash 719,787 1,327,360
Cash at beginning of year 3,941,876 2,390,546
------------- -------------
Cash and cash equivalents at end of period $ 4,661,663 $ 3,717,906
============= =============
</TABLE>
The accompanying notes are an integral part
of these financial statements.
6
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CTC COMMUNICATIONS CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include
all the information and footnote disclosures required by generally
accepted accounting principles for complete financial statements.
In the opinion of management all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation have been
included. Operating results for the three and nine months ended
December 31, 1996 are not necessarily indicative of the results
that may be expected for the year ending March 31, 1997. These
statements should be read in conjunction with the financial
statements and related notes included in the Company's Annual
Report on Form 10-K for the year ended March 31, 1996.
NOTE 2: CASH DIVIDENDS
The Company has not paid cash dividends during the period
presented.
NOTE 3: COMMITMENTS AND CONTINGENCIES
The Company is party to suits arising in the normal course of
business which either individually or in the aggregate are not
material.
NOTE 4. COMMON STOCK TRANSACTIONS SUBSEQUENT TO SEPTEMBER 30, 1996
Through February 4, 1997, 10,274 shares of Common Stock were issued
as a result of employees exercising outstanding stock options.
NOTE 5. NET INCOME PER SHARE
Net income per share is computed based on the weighted average
number of shares of common stock and, if dilutive, common stock
equivalent shares outstanding during the period. Common stock
shares result from the assumed exercise of common stock options
using the treasury stock method.
7
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<PAGE>
Part I
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Financial Statements and Notes set forth elsewhere in this
Report.
RESULTS OF OPERATIONS - THREE MONTHS AND NINE MONTHS ENDED
DECEMBER, 31 1996 AS COMPARED TO THE THREE MONTHS AND NINE MONTHS
ENDED DECEMBER 31, 1995.
Total revenues for the third quarter of Fiscal 1997 increased 22%
to $10,194,000 from $8,327,000 for the same period for the
preceding year (Fiscal 1996). Network service commission income,
which represents fees earned by the Company in its capacity as an
agent for various local and long distance telephone companies,
increased 4% to $7,266,000 for the three months ended December
31, 1996 from $7,003,000 for the third quarter of Fiscal 1996.
Resale product usage income, which represents the gross billings
to commercial accounts on the Company's long distance and
Internet access networks, increased 121% to $2,928,000 from
$1,324,000 for the same period of the preceding fiscal year.
Total revenues for the nine month period ended December 31, 1996
increased 23% to $28,818,000 from $23,428,000 for the same period
of Fiscal 1996. Network service commission income increased 5%
to $20,841,000 from $19,759,000 for the same period of the
preceding fiscal year. For the nine month period, the Company
recognized resale product usage income of $7,977,000 as compared
to $3,668,000 for the same period of Fiscal 1996, an increase of
117%.
Network service commission income increased 4% and 5%,
respectively, for the three and nine months ended December 31,
1996, as compared to the same periods of the prior fiscal year.
In both periods there was a sharp increase in the development of
new customer relationships, as well as substantial growth in unit
sales. These increases were mitigated substantial decreases in
certain fees and commissions payable under the Company's 1996
NYNEX Sales Agency Contract, which is adjusted annually. The
recently negotiated 1997 Sales Agency Contract resulted in no
significant changes in overall commission rates from 1996 levels.
Accordingly, anticipated increases in unit sales are expected to
result in increases in revenue during calendar 1997.
8
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For the quarter ended December 31, 1996, resale product usage
income included revenues derived from the reselling of Internet
access charges, as well as long distance services. The Company
intends to further leverage its customer relationships by
offering additional telecommunications products, including frame
relay, wireless services and pagers in subsequent quarters.
Selling, general, and administrative expenses increased 12% to
$6,000,000 for the third quarter of Fiscal 1997 as compared to
$5,335,000 for the third quarter of Fiscal 1996. For the nine
month period ended December 31, 1996, selling, general and
administrative expenses increased 7% to $17,058,000, as compared
to $15,921,000 for the same period of the preceding fiscal year.
These increases are primarily attributable to the increases in
the variable sales commission and bonus expenses incurred in
connection with the increases in revenues. In addition, the
Comany has increased the number of sales offices, particularly in
the Northeast, and hired additional account executives. The
Company also expanded the facilities at several of its existing
sales branches. The Company currently has the office space
capacity to expand its sales force to its goal of approximately
170 account executives by the end of 1997, from its current sales
force of 125. During the same periods, the Company also made
additional investments in its information systems.
Operating income for the third quarter of Fiscal 1997 decreased
to $1,932,000 from $1,942,000 for the same period of Fiscal 1996.
For the nine months ended December 31, 1996, operating income
increased to $5,666,000 from $4,613,000 for the same nine month
period of Fiscal 1996. The Company estimates that it will
utilize an effective tax rate of approximately 41% for the
balance of Fiscal 1997.
The period ended December 31, 1996 marks the fourteenth
consecutive quarter of profits for the Company. Management
believes that its strategy of building long term relationships
and offering additional products to these same customers, when
combined with continuing efforts to control costs, should result
in continued profitability throughout the balance of Fiscal 1997.
9
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LIQUIDITY AND CAPITAL RESOURCES
Working capital at December 31, 1996 amounted to $11,187,000, as
compared to $7,876,000 at March 31, 1996, an increase of 42%.
Cash balances at December 31, 1996 totaled $4,662,000.
On September 26, 1996, the Company amended its revolving line of
credit agreement with Fleet Bank, which is available under
certain conditions, to provide for an increase in the credit line
to $5,000,000 from $3,000,000 at the prime rate of interest, with
additional LIBOR pricing options.
The Company presently has no bank debt and expects that the
revolving credit line, together with cash flows from operations,
will be sufficient to meet the cash requirements of the Company
for the next twelve months.
The foregoing statements in Part I Item 2 regarding the Company's
intent to further leverage its customer relationships, its intent
to expand its sales force, its expectation of continued
profitability throughout the remainder of Fiscal 1997, its
expectation of increased network service commission income in
1997 and its ability to meet its cash requirements for the next
12 months are forward looking statements made in good faith
pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. There are several
factors that could cause actual results to differ materially from
those contained in such forward looking statements, including the
Company's inability to hire and retain experienced account
executives and increased competitive pressures from current and
additional suppliers of local and long-distance telephone
services.
Part II
Item 2
(c) During the quarter ended December 31, 1996, the registrant
issued a total of 9,787 shares of common stock for an aggregate
consideration of $12,330.70 pursuant to the exercise of employee
incentive stock options by five employees of the registrant. The
shares were issued in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of
1933, as amended, as transactions by an issuer not involving a
public offering. The recipients of the securities represented
their intention to acquire the securities for investment only and
not with a view to or for sale in connection with any
distribution thereof and appropriate legends were attached to the
share certificates and stop transfer orders given to the
registrant's transfer agent. All recipients had adequate access
to information regarding the registrant.
10
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
behalf by the undersigned thereunto duly authorized.
CTC COMMUNICATIONS CORP.
Date: February 12, 1997 /s/ ROBERT J. FABBRICATORE
----------------------------
Robert J. Fabbricatore
Chief Executive
Officer
Date: February 12, 1997 /s/ JOHN D. PITTENGER
-----------------------------
John D. Pittenger
Chief Financial
Officer
11
EXHIBIT 3.1
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT Federal Identification
General Laws, Chapter 156B, Section 72 No. 04-2731202
We, STEVEN P. MILTON, PRESIDENT and JOHN D. PITTENGER, CLERK, of
COMPUTER TELEPHONE CORP. located at 360 SECOND AVE., WALTHAM,
MASSACHUSETTS 02154 do hereby certify that these ARTICLES OF
AMENDMENT affecting Articles NUMBERED 1 of the Articles of
Organization were duly adopted at a meeting held on 09/26/96, by
vote of: 5,407,571 shares of Common Stock out of 9,601,155 shares
outstanding, being at least a majority of each type, class or
series outstanding and entitled to vote thereon:
To change Article 1 of the Restated Articles of Organization
relating to the name of the corporation to read as follows:
"1. The name by which the corporation shall be known is:
CTC Communications Corp."
The foregoing amendment will become effective when these articles
of amendment are filed in accordance with Chapter 156B, Section 6
of The General Laws unless these articles specify, in accordance
with the vote adopting the amendment, a later effective date not
more than thirty days after such filing, in which event the
amendment will become effective on such later date.
EFFECTIVE DATE: immediately upon filing.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have
hereunto signed our names this 26th day of September, in the year
1996.
/s/ STEVEN P. MILTON, President
/s/ JOHN D. PITTENGER, Clerk
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within articles of amendment and, the filing
fee in the amount of $100.00 having been paid, said articles are
deemed to have been filed with me this 30th day of September, 1996.
/s/ William Francis Galvin
William Francis Galvin, Secretary of the Commonwealth
<PAGE>
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THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
Federal Identification
No. 04-2731202
RESTATED ARTICLES OF ORGANIZATION
General Laws, Chapter 156B, Section 74
This certificate must be submitted to the Secretary of the
Commonwealth within sixty days after the date of the vote of
stockholders adopting the restated articles of organization. The
fee for filing this certificate is prescribed by General Laws,
Chapter 156B, Section 114. Make check payable to the
Commonwealth of Massachusetts.
-----------------------
We, Robert J. Fabbricatore, President, and John D. Pittenger,
Clerk, of Computer Telephone Corp., located at:
360 Second Avenue, Waltham, Massachusetts 02154
do hereby certify that the following restatement of the articles
of organization of the corporation was duly adopted at a meeting
held on August 21, 1995, by vote of 2,487,140 shares of Class 1
Common Stock out of 3,116,937 shares outstanding, being at least
two-thirds of each class of stock outstanding and entitled to
vote and of each class or series of stock adversely affected
thereby: -
1. The name by which the corporation shall be known is:-
Computer Telephone Corp.
2. The purposes for which the corporation is formed are as
follows:-
(a) For the sale, installation and service of computer
controlled tele-communication systems.
(b) To carry on any business or other activity which may be
lawfully carried on by a corporation organized under
the Business Corporation Law of The Commonwealth of
Massachusetts, whether or not related to those referred
to in the foregoing paragraph.
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3. The total number of shares and the par value, if any, of
each class of stock which the corporation is authorized to issue
is as follows:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE WITH PAR VALUE
----------------- --------------
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
- -------------- ---------------- ---------------- ---------
<S> <C> <C> <C>
Preferred None 1,000,000 $1.00
Common None 25,000,000 $ .01
</TABLE>
4. If more than one class is authorized, a description of each
of the different classes of stock with, if any, the preferences,
voting powers, qualifications, special or relative rights or
privileges as to each class thereof and any series now
established:
There are two (2) classes of stock of the corporation:
Common Stock, par value $.01 per share; and Preferred Stock,
par value $1.00 per share. A description of each such class
of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as
to each such class of stock is as follows:
A. RIGHTS AND PRIVILEGES AS TO COMMON STOCK
The preferences, voting powers, qualifications and
special rights or privileges of the Common Stock are as
follows:
1. DIVIDEND RIGHTS
(a) The holders of all then outstanding shares of
Common Stock shall be entitled to receive
dividends, when as and if declared by the
Board of Directors of the corporation, out of
any funds legally available therefor.
(b) Nothing in these Articles of Organization
shall be taken to mean that the Board of
Directors is under any obligation to declare
or pay dividends.
2. VOTING RIGHTS
(a) The holder of each share of Common Stock
shall be entitled to one vote per share.
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B. RIGHTS AND PRIVILEGES AS TO PREFERRED STOCK
1. The Board of Directors may fix, by resolutions
adopted prior to the issuance of any shares of a
particular series of Preferred Stock (to the
extent not inconsistent with the preferences,
rights and powers of series of Preferred Stock at
the time outstanding), the voting powers of stock
of such class, if any, and the designations,
preferences and relative, participating, optional
and other special rights and the qualifications,
limitations and restrictions of such series within
such class, including but without limiting the
generality of the foregoing, the following:
(a) The rate and times at which, and the terms
and conditions on which, dividends on
Preferred Stock of such series shall be paid;
(b) The right, if any, of the holders of
Preferred Stock of such series to convert the
same into, or exchange the same for, shares
of other series or classes of stock of the
corporation and the terms and conditions of
such conversions or exchanges;
(c) The redemption price or prices and the time
or times at which, and the terms and
conditions on which, Preferred Stock of such
series may be redeemed;
(d) The rights of the holders of Preferred Stock
of such series upon the voluntary or
involuntary liquidation, merger,
consolidation, distribution, or sale of
assets, dissolution or winding up of the
corporation; and
(e) The terms of the sinking fund or redemption
or purchase account, if any, to be provided
for the Preferred Stock of such series.
2. At any time when there shall have been
established and designated one or more series of
Preferred Stock consisting of a number of shares
which is less than all of the authorized number of
shares of Preferred Stock, the remaining
authorized shares of Preferred Stock shall be
deemed to be shares of an undesignated series of
Preferred Stock until designated by the Board of
Directors.
3. Notwithstanding the fixing of the number of
shares constituting a particular series, the Board
of Directors may at any time thereafter authorize
the issuance of additional shares of the same
series or the redesignation of any then unissued
shares of such series as authorized and unissued
Preferred Stock undesignated as to series.
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5. The restrictions, if any, imposed by the articles of
organization upon the transfer of shares of stock of any
class are as follows:
None.
6. Other lawful provisions, if any, for the conduct and
regulation of the business and affairs of the corporation,
for its voluntary dissolution, or for limiting, defining, or
regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
(a) The directors may make, amend or repeal the By-Laws in
whole or in part, except with respect to any provision
thereof which by law or the By-Laws requires action by
the stockholders.
(b) Meetings of the stockholders may be held anywhere in
the United States.
(c) The corporation may be a partner in any business
enterprise it would have the power to conduct by
itself.
(d) The directors shall have the power to fix from time to
time their compensation. No person shall be
disqualified from holding any office by reason of any
interest. In the absence of fraud, any director,
officer or stockholder of this corporation, or any
concern which is a stockholder of this corporation
individually, or any individual having any interest in
any concern in which any such directors, officers,
stockholders or individuals have any interest, may be a
party to, or may be pecuniarily or otherwise interested
in, any contract, transaction or other act of this
corporation, and
(1) such contract, transaction or act shall not be in
any way invalidated or otherwise affected by that
fact;
(2) no such director, officer, stockholder or
individual shall be liable to account to this
corporation for any profit or benefit realized
through any such contract, transaction or act;
(3) any such director of this corporation may be
counted in determining the existence of a quorum
at any meeting of the directors or of any
committee thereof which shall authorize any such
contact, transaction or act, and may vote to
authorize the same;
the term "interest" including personal interest
and interest as a director, officer, stockholder,
shareholder, trustee, member or beneficiary of any
concern; and
the term "concern" meaning any corporation,
association, trust, partnership, firm, person or
other entity other than this corporation.
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(e) No Director shall be personally liable to the
corporation or any stockholder for monetary damages for
breach of fiduciary duty as a director, except for any
matter in respect of which such director shall be
liable under Sections 61 and 62 of Chapter 156B of the
Massachusetts General Laws or any amendment thereto or
successor provisions thereto or shall be liable by
reason that, in addition to any and all other
requirements for such liability, he (i) shall have
breached his duty of loyalty o the corporation or its
stockholders, (ii) shall not have acted in good faith
or, in failing to act, shall not have acted in good
faith, (iii) shall have acted in a manner involving
intentional misconduct or a knowing violation of law
or, in failing to act, shall have acted in a manner
involving intentional misconduct or knowing violation
of law, or (iv) shall have derived an improper personal
benefit. Neither the amendment nor repeal of this
paragraph, nor the adoption of any provision of these
Restated Articles inconsistent with this paragraph,
shall eliminate or reduce the effect of this paragraph
in respect of any manner occurring, or any cause of
action, suit or claim that, but for this paragraph
would accrue or arise, prior to such amendment, repeal
or adoption of an inconsistent provision.
The date of the fiscal year of the corporation is March 31 each
year, and is unchanged.
The names and addresses of certain officers and directors of the
corporation are as follows:
President Robert J. Fabbricatore
55 Pequossette St., 1st Floor
Watertown, MA 02172
Treasurer John D. Pittenger
and Clerk 57 Pound St.
Medfield, MA 02052
Directors:
Robert J. Fabbricatore Richard J. Santagati
55 Pequossette St., 1st Floor 8 Farmland Circle
Watertown, MA 02172 Andover, MA 01810
Philip J. Richer Alphonse M. Lucchese
351 Berlin Rd. 15 Bower Circle
Marlboro, MA 01752 Sudbury, MA 01776
J. Richard Murphy
172 Chestnut St.
No. Andover, MA 01845
<PAGE>
<PAGE>
We further certify that the foregoing restated articles of
organization effect no amendments to the articles of organization
of the corporation as heretofore amended, except amendments to
the following articles 3 and 4:
Briefly describe amendments in space below:
Amendment to Article 3: Article 3 increases the authorized
Common Stock, $.01 par value per share, from 8,600,000 shares to
25,000,000 shares of Common Stock, par value $.01 per share.
Amendment to Article 4: Article 4 changes the name of the
"Class 1 Common Stock, par value $.01 per share" to "Common
Stock, par value $.01 per share."
Note: The 1,400,000 shares of Class 2 Common Stock were converted
to Class 1 Common Stock pursuant to the terms of the Restated
Articles of Organization filed with the Secretary of the
Commonwealth on March 4, 1985 thereby eliminating the Class 2
Common Stock.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have
hereto signed our names this 21st day of August in the year 1995.
/s/ Robert J. Fabbricatore, President
/s/ John D. Pittenger, Clerk
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 74
I hereby approve the within restated articles of organization
and, the filing fee in the amount of $16,700.00 having been paid,
said articles are deemed to have been filed with me this 23rd day
of August, 1995.
/s/ William Francis Galvin
William Francis Galvin, Secretary of the Commonwealth
Exhibit 11
CTC COMMUNICATIONS CORP.
STATEMENTS REGARDING COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
PRIMARY
<S> <C> <C> <C> <C>
Average shares outstanding 1,098 1,191 1,238 1,088
Net effect of stock options, if dilutive,
based on the treasury stock method
using the average market price 9,608 9,482 9,598 9,400
---------- ---------- ---------- ----------
Total 10,706 10,673 10,836 10,488
Net income $ 1,159 $ 1,175 $ 3,402 $ 2,813
---------- ---------- ---------- ----------
Net income per share $ 0.11 $ 0.11 $ 0.31 $ 0.27
---------- ---------- ---------- ----------
FULLY DILUTED
Average shares outstanding 1,098 1,191 1,254 1,130
Net effect of stock options, if dilutive,
based on the treasury stock method
using the period-end market price 9,608 9,482 9,598 9,400
---------- ---------- ---------- ----------
Total 10,706 10,673 10,852 10,530
Net income $ 1,159 $ 1,175 $ 3,402 $ 2,813
---------- ---------- ---------- ----------
Net income per share $ 0.11 $ 0.11 $ 0.31 $ 0.27
---------- ---------- ---------- ----------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 4,662
<SECURITIES> 0
<RECEIVABLES> 9,382
<ALLOWANCES> 190
<INVENTORY> 2
<CURRENT-ASSETS> 14,738
<PP&E> 6,707
<DEPRECIATION> 5,330
<TOTAL-ASSETS> 16,507
<CURRENT-LIABILITIES> 3,551
<BONDS> 0
0
0
<COMMON> 96
<OTHER-SE> 12,996
<TOTAL-LIABILITY-AND-EQUITY> 16,507
<SALES> 28,818
<TOTAL-REVENUES> 2,963
<CGS> 6,094
<TOTAL-COSTS> 23,152
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10
<INCOME-PRETAX> 5,801
<INCOME-TAX> 2,399
<INCOME-CONTINUING> 3,402
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,402
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
</TABLE>
