<PAGE> 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to .
---- ----
Commission File Number 0-23212
TELULAR CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 36-3885440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
920 Deerfield Parkway
Buffalo Grove, Illinois
60089
(Address of principal executive offices)
(Zip Code)
(847) 465-4500
(Registrant's telephone number, including area code)
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
--
The number of shares outstanding of the Registrant's common stock, par value
$.01, as of December 31, 1996, the latest practicable date, was 31,411,706
shares.
<PAGE> 2
TELULAR CORPORATION
INDEX
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION PAGE NO.
--------
Item 1. Financial Statements:
Consolidated Balance Sheets
December 31, 1996 and September 30, 1996 3
Consolidated Statements of Operations
Three Months Ended December 31, 1996 and 1995 4
Consolidated Statement of Equity
Period from September 30, 1996 to December 31, 1996 5
Consolidated Statements of Cash Flows
Three Months Ended December 31, 1996 and 1995 6
Notes to the Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE> 3
TELULAR CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
DECEMBER 31, SEPTEMBER 30,
1996 1996
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 15,136,360 $ 12,838,087
Receivables:
Trade, net of allowance for doubtful accounts of
$892,000 and $900,000 at December 31, 1996
and September 30, 1996, respectively 4,956,725 6,327,502
Related parties 4,458,893 4,088,481
------------- ------------
9,415,618 10,415,983
Inventories, net 11,230,058 12,791,701
Prepaid expenses and other current assets 359,475 180,569
------------- ------------
Total current assets 36,141,511 36,226,340
Property and equipment, net 2,605,103 2,325,389
Other assets:
Intangible assets, net 160,000 180,000
Investment in affiliate 3,146,598 3,146,208
Deposits and other 55,764 61,004
------------- ------------
3,362,362 3,387,212
------------- ------------
Total assets $ 42,108,976 $ 41,938,941
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable:
Trade $ 2,615,516 $ 1,794,505
Related parties 4,630,735 6,196,983
Accrued liabilities 1,781,147 1,677,671
------------- ------------
Total current liabilities 9,027,398 9,669,159
Convertible debentures - 1,500,000
------------- ------------
Total liabilities 9,027,398 11,169,159
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized; none outstanding - -
Common stock; $.01 par value; 40,000,000 shares
authorized; 31,411,706 and 31,016,675 outstanding
at December 31, 1996 and September 30, 1996, 319,583 315,768
respectively
Additional paid-in capital 109,878,509 108,310,915
Deficit (75,509,807) (76,250,194)
Treasury stock, 560,000 shares at cost (1,606,707) (1,606,707)
------------- ------------
Total stockholders' equity 33,081,578 30,769,782
------------- ------------
Total liabilities and stockholders' equity $ 42,108,976 $ 41,938,941
============= ============
</TABLE>
See accompanying notes.
3
<PAGE> 4
TELULAR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
1996 1995
----------- -----------
<S> <C> <C>
Net sales to third parties $ 6,578,770 $ 3,789,236
Net sales to related parties 11,801,390 239,089
----------- -----------
Total net sales 18,380,160 4,028,325
Cost of sales 13,797,183 3,742,170
----------- -----------
4,582,977 286,155
Engineering and development expenses 1,340,026 1,488,141
Selling and marketing expenses 1,080,032 1,939,932
General and administrative expenses 1,510,912 1,935,935
Provision for doubtful accounts 183,821 45,500
Amortization charges 54,241 321,597
----------- -----------
Income (loss) from operations 413,945 (5,444,950)
Other income 326,442 214,734
----------- -----------
Net income (loss) $ 740,387 $(5,230,216)
=========== ============
Net income (loss) per common share $ 0.02 $ (0.22)
=========== ============
Weighted average number of common shares outstanding 31,442,993 23,716,289
=========== ============
</TABLE>
See accompanying notes.
4
<PAGE> 5
TELULAR CORPORATION
CONSOLIDATED STATEMENT OF EQUITY
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
PREFERRED COMMON PAID-IN TREASURY STOCKHOLDERS'
STOCK STOCK CAPITAL DEFICIT STOCK EQUITY
------------ -------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1996 $ - $315,768 $108,310,915 $ (76,250,194) $(1,606,707) $30,769,782
Proceeds from the conversion of
debentures and issuances of
common stock - 3,815 1,567,594 - - 1,571,409
Net income for period from October 1,
1996 to December 31, 1996 - - - 740,387 - 740,387
------------ -------- ------------ ------------- ----------- -----------
Balance at December 31, 1996 $ - $319,583 $109,878,509 $ (75,509,807) $(1,608,707) $33,081,578
============ ======== ============ ============== =========== ===========
</TABLE>
See accompanying notes
5
<PAGE> 6
TELULAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 740,387 $ (5,230,216)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities
Depreciation 186,330 341,043
Amortization 54,241 321,597
Interest on debentures 2,927 -
Compensation expense - 62,603
Equity in net income of investment (390) -
Changes in assets and liabilities:
Receivables 1,370,777 (354,363)
Related parties (1,936,660) 585,133
Inventories 1,561,643 (1,022,386)
Prepaid expenses, deposits and other (139,425) (736,448)
Accounts payable 821,011 (484,832)
Accrued liabilities 103,476 (549,124)
----------- ------------
Net cash provided by (used in) operating activities 2,764,317 (7,066,993)
INVESTING ACTIVITIES:
Acquisition of property and equipment (466,044) (767,743)
----------- ------------
Net cash used in investing activities (466,044) (767,743)
FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 140,523
Payments on revolving line of credit - (8,000,000)
Proceeds from convertible debentures - 18,000,000
Payment of deferred financing costs - (515,000)
----------- ------------
Net cash provided by financing activities - 9,625,523
----------- ------------
Net increase in cash and cash equivalents 2,298,273 1,790,787
Cash and cash equivalents, beginning of period 12,838,087 21,552,372
----------- ------------
Cash and cash equivalents, end of period $15,136,360 $ 23,343,159
=========== ============
</TABLE>
See accompanying notes.
<PAGE> 7
TELULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated 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
Article 10 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 three months ended December 31, 1996 are not
necessarily indicative of the results that may be expected for the full
fiscal year ending September 30, 1997. For further information, refer to
the consolidated financial statements for the fiscal year ended September
30, 1996.
2. INVENTORIES
The components of inventories consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1996
----------------- -------------
<S> <C> <C>
Raw materials $ 8,878,177 $11,196,334
Work in process 552,426 466,768
Finished goods 3,158,455 2,327,599
----------------- -------------
12,589,058 13,990,701
Less: Reserve for obsolescence 1,359,000 1,199,000
----------------- -------------
$ 11,230,058 $12,791,701
================= =============
</TABLE>
3. CONVERTIBLE DEBENTURES
On December 11, 1995, the Company issued $18,000,000 in convertible
debentures (the Debentures) at 4% per annum, which were to mature on
December 11, 1997. The Debentures were issued under the provisions of
Regulation S as promulgated under the United States Securities Act of
1933, as amended. Holders of the Debentures were entitled, at their
option any time after issuance until December 10, 1997, to convert
principal and interest accrued thereon, in whole or in part, into shares
of common stock using defined conversion formulas based on NASDAQ closing
bids for the Company's common stock. The Company was entitled, at its
option any time commencing one year after issuance (and under certain
circumstances prior to that date) through maturity, to require the
holders to convert the principal and accrued interest into shares of
common stock of the Company using defined conversion formulas based on
NASDAQ closing bids for the Company's common stock. By November 30,
1996, the entire issuance of convertible debentures and interest accrued
thereon were converted into approximately 7,033,000 shares of common
stock.
4. CONTINGENCIES
The Company is involved in legal proceedings which arise in the ordinary
course of business. While any litigation contains an element of
uncertainty, based upon the opinion of the Company's counsel, management
believes that the outcome of such proceedings will not have a material
adverse effect on the Company's consolidated financial position and
results of operations.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company designs, develops, manufactures and markets products based on its
proprietary interface technologies, which allow most standard wireline customer
premises equipment -- phones, facsimile machines, computer modems, PBXs, and
key systems, among others -- to operate over wireless telecommunications
networks. Currently, the Company is devoting a substantial portion of its
resources to international market development, extension of its core product
line to new wireless standards, expansion, protection and licensing of its
intellectual property rights, and development of underlying radio technology.
The Company's operating expense levels are based in large part on expectations
of future revenues. If anticipated sales in any quarter do not occur as
expected, expenditure and inventory levels could be disproportionately high,
and the Company's operating results for that quarter, and potentially for
future quarters, could be adversely affected. Certain factors that could
significantly impact expected results are described in "Cautionary Statements
Pursuant to the Securities Litigation Reform Act" which is an exhibit to Form
10-K filed for the period ended September 30, 1996.
RELATIONSHIP WITH MOTOROLA, INC.
In November 1993, the Company entered into a strategic agreement with Motorola
Inc. ("Motorola"), whereby Motorola, through its Cellular Subscriber Group,
acquired an interest in the Company and received an option to increase its
holdings. Motorola exercised the option in April 1994 and now owns
approximately 15% of the outstanding shares of common stock. Motorola also
obtained the right to representation on the Company's Board of Directors. In
addition, the Company both purchases from and sells to Motorola in material
quantities. For further information about the Company and Motorola, refer to
Form 10-K filed for the period ended September 30, 1996.
RESTRUCTURING
On January 22, 1996, the Company announced a restructuring program (the
"Restructuring Program") which was implemented during the second and third
quarters of fiscal 1996. The difficulty in predicting demand for the Company's
products, due in part to immature foreign markets, underscored the importance
of properly aligning costs and expenses to attainable levels of revenue.
Manufacturing and engineering consolidation, outsourcing and the elimination of
non-core product lines were the focus of the restructuring. The Company's
Puerto Rico and Buffalo Grove manufacturing operations were phased out during
the second fiscal quarter, and production was consolidated at the Company's
Atlanta, Georgia facility. The Restructuring Program reduced general,
administrative and manufacturing costs Company-wide. The number of employees
decreased from over 250 in January 1996 to less than 110 by the end of November
1996. Restructuring and impairment charges amounting to approximately $11.0
million were incurred during the second and third fiscal quarters of 1996. The
Company will experience approximately $1.2 million in reduced amortization
charges in each of the next five years as the result of intangible assets
written off as restructuring or impairment charges. Also, depreciation charges
were reduced as part of the restructuring, but may return to formal levels or
increase in the future as the Company plans to move into a new facility and
update manufacturing equipment during fiscal 1997. Wages decreased as part of
the restructuring, but may increase in future periods if the demand for the
Company's products meets Management's expectations.
8
<PAGE> 9
RESULTS OF OPERATIONS
FIRST QUARTER FISCAL 1997 COMPARED TO FIRST QUARTER FISCAL 1996
Net Sales. First quarter fiscal 1997 sales increased by $14.4 million to $18.4
million, which is more than quadruple the sales for the same period in fiscal
1996. Sales of fixed wireless terminals (FWTs) accounted for almost the entire
increase as shipments to Motorola for the wireless local loop (WLL) project in
Hungary represented approximately 60% of first quarter fiscal 1997 sales.
Sales of FWTs in the Asian, European, Middle Eastern and African regions and of
wireless security alarm products also increased over 60% in fiscal 1997
compared to the same period in fiscal 1996.
Gross Profit. First quarter fiscal 1997 gross profit increased by $4.3 million
compared to the same period in fiscal 1996. The increase was primarily due to
the substantial increase in sales volumes in fiscal 1997 as compared to fiscal
1996. The gross profit margin increased to 25.0% in fiscal 1997 versus 7.1% in
fiscal 1996. Margins improved over the prior period in part because the
Company restructured and consolidated manufacturing facilities during the
second and third quarters of fiscal 1996 which resulted in lower manufacturing
costs in subsequent quarters, higher 1997 sales volumes increased throughput
during 1997 and resulted in the absorption of fixed costs over more units than
1996 and an inventory reduction program that took place during fiscal 1996
also resulted in low-margin sales during the quarter ended December 31, 1995.
Engineering and Development Expenses. Engineering and development expenses
decreased 10.0% compared to the same quarter in fiscal 1996. Engineering and
development were lower in the current quarter as a result of the Restructuring
Program.
Selling and Marketing expenses. Selling and marketing expenses for the first
quarter of fiscal 1997 decreased 44.3% compared to the same quarter in fiscal
1996. This decrease was primarily a result of the Company's realignment, as
part of its Restructuring Program, of its worldwide sales organization during
fiscal 1996.
General and Administrative Expenses (G&A). G&A for the first quarter decreased
22.0% compared to the same quarter of fiscal 1996. The decrease was primarily
attributable to the reduction or elimination of expenditures, primarily through
headcount reductions, achieved through the Restructuring Program.
Provision for doubtful accounts. The provision for doubtful account expense
increased from the same quarter in fiscal 1996 commensurate with the increase
in sales during fiscal 1997.
Amortization Charges. Amortization charges for the first quarter decreased by
over 80% compared to the same quarter in fiscal 1996. Intangible assets written
off as part of restructuring and impairment charges during the second and third
quarters of fiscal 1996 significantly reduced the intangible asset balance and
related amortization charges in fiscal 1997 compared to fiscal 1996.
Other Income. First fiscal quarter 1997 net other income was higher compared
to the same fiscal quarter in 1996 primarily due to lower other expenses in the
current period.
Net Income. The Company recorded net income of $0.7 million or $0.02 per share
for the first quarter in fiscal 1997 compared to a loss of $5.2 million or
($0.22) per share in the same quarter in fiscal 1996.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had $15.1 million in cash and cash
equivalents with a net working capital surplus of approximately $27.1 million.
Net cash generated in operating activities was $2.8 million during the first
three months of fiscal 1997 compared to $7.1 million in cash used in the same
period of the prior fiscal year. In addition to the profit generated during
the quarter, collections of trade receivables and higher inventory turnover
contributed to the positive flow of funds from operations in fiscal 1997.
Cash used for capital spending and other investing activities was approximately
$0.5 million during the first quarter of fiscal 1997, compared to $0.8 million
in the same period during fiscal 1996.
No financing activities took place during the first three months of fiscal 1997
compared to net cash generated of $9.6 million during the same period in fiscal
1996. The prior period's increase resulted primarily from proceeds received
pursuant to the issuance of $18.0 million of convertible debentures (see
below), which were offset in part by $8.0 million in payments against the
Company's revolving line of credit.
During fiscal 1995, the Company entered into a Loan and Security Agreement (the
"Agreement") with LaSalle National Bank which, among other things, provides a
credit facility with a loan limit of $20.0 million. Borrowings under the
Agreement are subject to borrowing base requirements and other conditions.
Under the Agreement, the Company also is required to comply with certain
affirmative and negative covenants. There were no borrowings under the
Agreement at December 31, 1996. The agreement terminates on March 1, 1997, and
the Company is in the process of replacing the facility.
On December 11, 1995, the Company issued $18,000,000 in convertible debentures
(the "Debentures") at 4% per annum which were to mature on December 11, 1997.
The Debentures were issued under the provisions of Regulation S as promulgated
under the United States Securities Act of 1933, as amended. During the quarter
ended December 31, 1996, the final $1,500,000 of the Debentures plus interest
accrued thereon were converted into approximately 378,000 shares of common
stock.
Based on its current operating plan, the Company believes its existing capital
resources, including the credit facility, should enable it to maintain its
current and planned operations through 1997. However, management is in the
process of raising $15-20 million of additional capital primarily for research
and product development. Beyond the specific research and product development
needs, expected future uses of cash include working capital requirements,
marketing and sales support programs in anticipation of future revenues and
certain capital expenditures. Cash requirements may vary and are difficult to
predict given the nature of the developing markets targeted by the Company.
The amount of royalty income from the Company's licensees is unpredictable, but
could have an impact on the Company's actual cash flow.
The Company requires letters of credit or qualification for export credit
insurance underwritten by the Export-Import Bank of the United States on a
substantial portion of its international sales orders. Also, to mitigate the
effects of currency fluctuations on the Company's results of operations, the
Company endeavors to conduct all of its international transactions in U.S.
dollars. To date, the Company's sales have not been adversely affected by
currency fluctuations; however, as the Company's international operations grow,
foreign exchange or the inflation of a foreign currency may pose greater risks
for the Company, and the Company may be required to develop and implement
additional strategies to manage these risks.
10
<PAGE> 11
OUTLOOK
The statements contained in this outlook are based on current expectations.
These statements are forward looking, and actual results may differ materially.
The Company expects fiscal 1997 sales levels to exceed fiscal
1996 sales levels; however, the degree to which that occurs largely depends,
among other things, upon follow on business for the Hungary project. Second
quarter fiscal 1997 revenues are anticipated to exceed the same
period in the prior year, primarily due to projected completion of Phase One
shipments for the WLL project in Hungary. The Company is exploring a number of
opportunities, including the right to supply FWTs for Phases Two and Three of
the Hungary project. The Company expects the demand for FWTs to continue to
grow and is cultivating other revenue opportunities that it believes will
contribute to future revenue growth. The Company has hired and plans to hire
additional personnel to coordinate market opportunities.
To capitalize on the anticipated growth in the market for FWTs, the Company
launched a product development plan during fiscal 1996. The
strategy has been, and continues to be, to introduce fixed wireless terminals
over the next three years that will address the radio standards serving 85
percent of all cellular subscribers in the year 2000. The Company plans to
continue to devote substantial resources to product development. Pursuant to
the terms of its agreement with TelePath Corporation the Company plans to
increase its equity position in TelePath Corporation to 50% by August of 1997
through the issuance of shares of the Company's common stock and cash payments.
In addition, the Company has and will continue to hire additional qualified
engineering personnel. The Company has also engaged and plans to contract with
additional vendors to assist with the execution of its product development
plan. The Company is seeking to raise $15-20 million of additional capital
that is primarily earmarked for research and product development.
The Company announced, that in conjunction with product development and other
matters, it intended to relocate manufacturing to Vernon Hills, Illinois, a
suburb of Chicago, during fiscal 1997. The move will geographically
consolidate the Company's engineering, sales, marketing and manufacturing
resources, which the Company believes will make new product introduction more
efficient, improve overall quality and increase manufacturing capacity. Most
of the relocation activities are expected to be completed by the end of the
third fiscal quarter.
In summary, the Company believes that the market for FWTs is undergoing
substantial growth. The Company is seeking to capitalize on the anticipated
growth by devoting resources across the Company to meet the anticipated needs
of the market.
Statements contained herein, other than historical statements, consist of
forward looking information. The Company's actual results may vary
considerably from those discussed in the "Outlook" section and elsewhere in
this filing as a result of various risks and uncertainties. For example, there
are a number of uncertainties as to the degree and duration of the revenue
momentum, which could impact the Company's ability to sustain recent
profitability as lower sales may likely result in lower margins. In addition,
product development and the relocation of manufacturing facilities, which are
expected to benefit future periods, are likely to have a negative impact on near
term earnings. Other risks and uncertainties, which are discussed in greater
detail in Exhibit 99 to the Company's Annual Report on Form 10-K for the year
ended September 30, 1996, include the risk that technological change will
render the Company's technology obsolete, the risk of litigation, the Company's
ability to develop new and foreign markets, the Company's dependence on
contractors and on Motorola, the Company's ability to maintain quality control,
the risk of doing business in developing markets, the Company's dependence on
research and development, the uncertainty of additional funding, the effect
of changes in management, and uncertainty in the development of wireless service
generally.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (listed by number according to Exhibit table of Item 601 in
Regulation S-K)
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER DESCRIPTION REFERENCE
3.1 Certificate of Incorporation Filed as Exhibit 3.1 to
Registration Statement
No. 33-72096
(the "Registration
Statement")
3.2 Amendment No. 1 to Certificate Filed as
of Incorporation Exhibit 3.2 to
the Registration
Statement
3.3 Amendment No. 2 to Certificate File as
of Incorporation Exhibit 3.3 to
the Registration
Statement
3.4 By-Laws Filed as
Exhibit 3.4 to
the Registration
Statement
4.1 Loan Agreement with LaSalle Filed as Exhibit
National Bank and Amendment 4.1 to Form 10-K
thereto filed December
27, 1995
4.2 Debenture Agreements dated Filed as Exhibit
December 11, 1995 4.2 to Form 10-K
filed December
27, 1995
11 Statement regarding computation Filed herewith
of per share earnings
27 Article 5 Disclosure Filed herewith
(b) Reports on Form 8-K
</TABLE>
The Company did not file any reports on Form 8-K during the three months
ended December 31, 1996.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this Report of Form 10-Q to be signed on its behalf by
the undersigned, thereunto duly authorized.
Telular Corporation
Date February 14, 1997 By: /s/ Kenneth E. Millard
--------------------- -----------------------------------
Kenneth E. Millard
President & Chief Executive Officer
Date February 14, 1997 /s/ Frank J.M. ten Brink
--------------------- -----------------------------------------------
Frank J.M. ten Brink
Chief Financial Officer & Senior Vice President
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER DESCRIPTION REFERENCE
- ------ ----------- ---------
3.1 Certificate of Incorporation Filed as Exhibit 3.1 to
Registration Statement
No. 33-72096 (the "Registration
Statement")
3.2 Amendment No. 1 to Certificate Filed as
of Incorporation Exhibit 3.2 to
the Registration
Statement
3.3 Amendment No. 2 to Certificate Filed as
of Incorporation Exhibit 3.3 to the
Registration
Statement
3.4 By-Laws Filed as Exhibit 3.4 to
the Registration
Statement
4.1 Loan Agreement with LaSalle Filed as Exhibit
National Bank and Amendment 4.1 to Form 10-K
thereto filed December
27, 1995
4.2 Debenture Agreements dated Filed as Exhibit
December 11, 1995 4.2 to Form 10-K
filed December
27, 1995
11 Statement regarding computation Filed herewith
of per share earnings
27 Article 5 Disclosure Filed herewith
</TABLE>
14
<PAGE> 1
EXHIBIT (11) - STATEMENT RE: COMPUTATION OF PRO FORMA EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
Average number of shares outstanding............ 31,442,993 23,716,289
=========== ============
Net loss $ 740,387 $ (5,230,216)
=========== ============
Net loss per share $ 0.02 $ (0.22)
=========== ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000915324
<NAME> TELULAR CORPORATION
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 15,136,360
<SECURITIES> 0
<RECEIVABLES> 10,307,618
<ALLOWANCES> 892,000
<INVENTORY> 11,230,058
<CURRENT-ASSETS> 36,141,511
<PP&E> 4,884,103
<DEPRECIATION> 2,279,000
<TOTAL-ASSETS> 42,108,976
<CURRENT-LIABILITIES> 9,027,398
<BONDS> 0
0
0
<COMMON> 319,583
<OTHER-SE> 32,761,995
<TOTAL-LIABILITY-AND-EQUITY> 42,108,976
<SALES> 18,380,160
<TOTAL-REVENUES> 18,380,160
<CGS> 13,797,183
<TOTAL-COSTS> 13,797,183
<OTHER-EXPENSES> 4,169,032
<LOSS-PROVISION> 183,821
<INTEREST-EXPENSE> 34,241
<INCOME-PRETAX> 413,945
<INCOME-TAX> 0
<INCOME-CONTINUING> 413,945
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 740,387
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
