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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 27, 1997
( ) 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: 0-10726
C-COR ELECTRONICS, INC.
(Exact name of Registrant as specified in its charter)
Pennsylvania 24-0811591
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 Decibel Road
State College, Pennsylvania 16801
(Address of principal executive offices and Zip Code
Registrant's telephone number, including area code: (814) 238-2461
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
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 ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ( )
As of September 5, 1997, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was $122,115,561.
As of September 5, 1997, the Registrant had 9,141,514 shares of Common Stock
outstanding.
Documents Incorporated by Reference:
1) 1997 Annual Report to Shareholders (Parts I, II and IV)
2) Proxy Statement dated September 15, 1997 (Part III)
PART I
Item 1. Business
Some of the information presented in this report constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Although the Corporation believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge of its business and
operations, there can be no assurance that actual results will not differ
materially from its expectations. Factors which could cause actual results to
differ from expectations include the timing of orders received from customers;
the gain or loss of significant customers; changes in the mix of products sold;
changes in the cost and availability of parts and supplies; fluctuations in
warranty costs; completion of a tentative settlement for certain litigation; new
product development activities; regulatory changes affecting the
telecommunications industry, in general, and the Corporation's operations, in
particular; competition and changes in domestic and international demand for the
Corporation's products; and other factors which may impact operations and
manufacturing. For additional information concerning these and other important
factors which may cause the Corporation's actual results to differ materially
from expectations and underlying assumptions, please refer to the reports filed
by the Corporation with the Securities and Exchange Commission.
Introduction
C-COR Electronics, Inc. (the "Corporation") was incorporated in the Commonwealth
of Pennsylvania on June 30, 1953. Prior to fiscal year 1996, the Corporation
operated in one industry segment broadly defined as the Electronic Distribution
Products segment. During the fiscal year ended June 28, 1996, a fundamental
shift occurred in the markets and customers, as cable television (CATV)
operators reduced their purchases of the Corporation's Digital Fiber Optics
Equipment in lieu of other technology alternatives. As a result, in fiscal years
1996 and 1997, the Corporation operated in two industry segments: the Electronic
Distribution Products segment which represents the Corporation's continuing
operations and provides hybrid fiber coax (HFC) equipment for signal
distribution applications, primarily to the CATV market; and the Digital Fiber
Optics Transmission Products segment which has been reported as a discontinued
business segment in fiscal year 1997 and provides products for long-distance,
point-to-point video, voice and data signal transmission applications, primarily
for telephony, distance-learning and other non-CATV markets. On July 10, 1997,
the Corporation announced its intent to discontinue its Digital Fiber Optics
Transmission Products segment in a phase-down process expected to span nine
months. See "Discontinued Operations." In the remainder of this document, the
discussions are based on continuing operations, except where the context
indicates otherwise. The Corporation's headquarters are in State College,
Pennsylvania, and its manufacturing facilities are in State College, Reedsville,
and Tipton, Pennsylvania, and in Tijuana, Mexico. The Corporation also maintains
administrative offices in Denver, Colorado; Toronto, Canada; Almere, The
Netherlands; and Hong Kong. During fiscal year 1997, the Corporation announced
that it would transfer the manufacture of the power supply assembly component of
its radio frequency (RF) amplifiers to the Corporation's new production facility
in Mexico in the summer of 1997. That transfer has taken place and initial
shipments began in August 1997.
The Corporation has been approved for ISO 9001 registration at its Pennsylvania
manufacturing facilities. ISO 9001 is the most comprehensive of all ISO 9000
series requirements and includes quality assurance in design, development,
production, installation and servicing. Criteria for registration are set by the
International Organization for Standardization, whose function is to develop
global standards in an effort to improve the exchange of goods and services
internationally. This designation builds on the Corporation's reputation as a
high-quality, global provider of transmission electronics.
ELECTRONICS DISTRIBUTION PRODUCTS SEGMENT
Products and Services
The Corporation provides three principal product families for use in broadband
voice, video, and data networks: RF amplifiers, amplitude modulation (AM) fiber
optic equipment, and network management systems. Amplifiers include a series of
FlexNet(R) 862 MHz and 750 MHz trunks, terminating bridgers, and line extenders
designed specifically for use in today's widely-accepted HFC network
architectures. The newest addition to this line is FlexNet(R) 900 Series
amplifiers, which offer high performance, two-way capability, and advanced
powering for today's complex communications networks. Other RF distribution
products available from the Corporation include push-pull, power-doubling, and
feedforward technologies; trunk, minitrunk, and split-band amplifiers; and main
line passives to 1 GHz. In fiscal year 1997, shipments began of the I-Flex(TM)
global product family, specially designed for fiber-intensive architectures that
require cabinet and pedestal mount housings. Featuring 862 MHz bandwidth
capability, the I-Flex(TM) product line consists of amplifiers and fiber optic
nodes.
The Corporation's AM fiber optic products include a wide range of both headend
and strand-mounted equipment designed for use in HFC applications. Headend
equipment, which operates up to 862 MHz, includes a universal mainframe,
high-performance Distribution Feedback (DFB) transmitters at a variety of output
powers, receivers for both forward and return path applications, and power
supplies. FlexNode (TM), the Corporation's 6-port AM fiber optic node, features
750 MHz and 862 MHz bandwidth capability, maximum performance with RF and optics
in one module, simplified internal fiber management and 90 volt powering. The AM
fiber optic products are fully integrated into the Corporation's Cable Network
Management (CNM(TM)) system.
CNM(TM) is a network management system that is playing an increasingly critical
role in communications. This user-friendly, computer-based control and
monitoring system aids in outage prediction, notifying the operator of problems,
often before they even occur, so maintenance crews can go directly to a problem
without having to search the system unit by unit.
In fiscal year 1997, the Corporation announced a cooperative marketing agreement
with Bay Networks, Inc., LANcity Cable Modem Division (now called Broadband
Technologies Division), to focus on delivery of high-speed data over HFC
networks. The companies agreed to work together to help ensure interoperability
of equipment and quality delivery of high-speed data over these networks. The
first step in the relationship has involved focusing on interoperability of Bay
Networks' modems and the Corporation's DataSelect(TM) offering of HFC equipment
and related technical services.
In support of its products, the Corporation offers a complete line of technical
customer services, including pre-sale analysis and consultation, network design,
field engineering, technical documentation, training seminars, and equipment
repair and testing.
Sales and Distribution
The Corporation's principal customers include operators of communication
networks worldwide, as well as network integrators. During fiscal year 1997,
consolidation continued to occur among cable operators in the domestic CATV
industry; however, the Corporation does not consider that occurrence to have had
a material impact on its business. Most of the Corporation's sales were
comprised of equipment manufactured or provided by the Corporation, with the
remainder being from services. Sales efforts are conducted from the
Corporation's headquarters; from offices in Colorado, Canada and Europe; and
from 8 regional sales offices located throughout the United States.
For the fiscal year ended June 27, 1997, the Corporation's international sales
from continuing operations represented 19% of net sales, primarily in the
Canadian, Asian, European, and Latin American markets. In the fiscal years ended
June 28, 1996, and June 30, 1995, international sales from continuing operations
were 39% and 40%, respectively, of net sales. See the discussion of segment
information in the Corporation's 1997 Annual Report to Shareholders, Note R,
incorporated herein by reference.
During the past fiscal year, the Corporation's CATV customers have included
almost all of the largest system operators in the United States. The
Corporation's largest customer during the fiscal year ended June 27, 1997, was
Time Warner Cable, which accounted for 36% of net sales. The Corporation's
largest customers during the fiscal year ended June 28, 1996 were Rogers
Cablesystems, Inc. and Time Warner Cable, each accounting for 18% of net sales.
During the fiscal year ended June 30, 1995, the Corporation's largest customers
were Rogers Cablesystems, Inc., accounting for 24% of the net sales, and Time
Warner Cable, accounting for 19% of net sales. No other customer accounted for
10% or more of net sales during fiscal years 1995, 1996, and 1997, respectively.
At June 27, 1997, the Corporation's backlog of orders was $34.9 million. At June
28, 1996, the Corporation's backlog of orders was $24.3 million, and at June 30,
1995, it was $53.8 million. For additional information regarding backlog, refer
to Management's Discussion and Analysis of Financial Condition and Results of
Operation incorporated herein by reference to pages 17 through 20 of the
Registrant's 1997 Annual Report to Shareholders.
Research and Product Development
The Corporation operates in an industry that is subject to rapid changes in
technology. The Corporation's ability to compete successfully depends in large
part upon its ability to react to such changes. Accordingly, the Corporation is
engaged in ongoing research and development activities that are intended to
advance existing product lines, provide custom-designed variations of existing
product lines, and develop or evaluate new products. Research and development
activities for the three major product groups are conducted at the Corporation's
headquarters. The Corporation has an interdepartmental team which assigns
product development priorities. The result is a market-driven set of guidelines
for the timely development of new products. During this past fiscal year,
research and product development expenditures have been primarily directed at
expanding the Corporation's RF amplifier line, AM fiber optic technology and
network management systems.
During fiscal year 1997, the Corporation continued implementation of product
development process changes in order to improve cycle time to design, develop
and deliver new products; reduce manufacturing costs; and improve design
quality.
During the fiscal years ended June 27, 1997, June 28, 1996, and June 30, 1995,
the Corporation spent approximately $5,681,000, $4,857,000, and $3,786,000,
respectively, on research and development, primarily related to RF distribution
equipment, AM fiber optic systems, and network management. Anticipated new
product development initiatives focused on AM fiber optics, network management,
and other technology areas, are expected to result in increased research and
development expense in future years, as compared to fiscal year 1997. None of
the research and product development expenditures have been capitalized.
Competition
The Corporation's products are marketed with emphasis on their premium quality
and are generally priced competitively with other manufacturers' product lines.
Equipment reliability, superior customer service and an enhanced warranty
program are several of the key criteria for competition. In these respects, the
Corporation considers its competitive position to be favorable. Other bases for
competition include pricing and technological leadership. Although less
expensive products are available, the Corporation believes it is in a good
competitive position with respect to pricing. The Corporation believes that its
strong commitment to efficient network design, a broad offering of technical
customer services, and its focus on research and development, enhance its
competitive position in the market.
There are several competing equipment vendors selling network products in the
United States, a few of which have greater sales of similar equipment than the
Corporation; however, the Corporation believes it offers a broader product line
in the RF distribution amplifier segment of the market.
Currently, CATV networks serve more than 64.5 million subscribers in the United
States. CATV construction has evolved to the point where this network passes
over 95% of TV households in the United States. The CATV industry claims that
their market penetration exceeds 60% and is approaching 65%. Over the next
several years, most industry observers expect this trend to continue. However,
there are alternative methods of distributing entertainment video or information
services to subscribers. All of the methods compete, to a limited extent, with
conventional CATV services. The alternative distribution technologies include
Off Air Broadcast Service, Multichannel Multipoint Distribution Service (MMDS),
Local Multipoint Distribution Service (LMDS), Satellite Master Antenna
Television (SMATV), and Direct Broadcast Satellite Service (DBS). Generally,
these alternative technologies are limited in terms of their ability to deliver
two-way service and/or local programming. Based upon these limitations, it is
the Corporation's belief that such technologies will mature to the point that
they serve a relatively narrow segment of the market. On the other hand, a CATV
network has two-way capability and has the ability to deliver vast amounts of
information to subscribers. As a result, the Corporation believes that the CATV
industry is uniquely positioned to benefit from the evolution that is occurring
in the telecommunications industry, particularly in the area of high-speed data
delivery. Similarly, due to its reputation and long-standing tradition of
servicing the CATV industry with excellence, the Corporation believes that it is
strategically positioned to grow and expand with the industry.
External Influences/Industry
The primary market factors affecting the global communications industry include
access to funding, technology advancements, and government regulations. The
increased demand for products offered by the Corporation to domestic and
international customers has resulted from a combination of the market factors
listed above. In recent years, the global communications industry has grown
rapidly by constructing networks to meet the increased demand for video, voice,
and data services.
A significant amount of consolidation has occurred over recent years in the
domestic communications industry. Cable companies have bought other cable
companies in order to achieve efficiency through clustering of properties.
Telephone companies (telcos) have bought telcos. Telcos have even bought cable
companies. Overall, the Corporation believes this consolidation has, in some
cases, led to delays in plans for network construction resulting in slower
ordering of products and services as network planners take time to assess their
new situation.
In the area of technology, advancements in the global communications industry
are occurring at a rapid rate. Traditional, one-way broadband amplifier cascades
are being replaced by two-way HFC architectures which employ fiber optic
electronics to individual service cells (nodes). The Corporation believes that
HFC networks could have significant strategic advantages in the future as the
demand grows for the highest-capacity, lowest-cost networks for delivery of
two-way, high-speed, data service. The Corporation has combined its strength in
conventional RF amplifiers with an increasing presence in the areas of AM fiber
optics and network management systems, and believes that it is well positioned
to be a supplier in the interactive multimedia network industry.
Cable operators have traditionally used HFC network architectures for providing
video services to the home. The HFC network architecture utilized in the CATV
industry has been embraced by several telcos, while others continue to explore
their options between HFC and other approaches and technologies, such as DBS,
FTTC (fiber to the curb) and ADSL (asymmetrical digital subscriber line). Sales
by the Corporation of HFC equipment to customers in the telephone industry
declined in fiscal year 1997. The Company believes the decline resulted from
reassessment of strategic alternatives and priorities by the telcos in
connection with pursuing direct competition with cable MSO's in providing video
services.
The regulatory environment in the United States has changed in recent periods
with the passage of the Telecommunications Act of 1996. Key provisions of the
Telecommunications Act are designed to enhance competition in the industry in
that they permit telcos to sell video services, and in some cases, to buy out
local cable companies; allow cable operators to charge what they wish for many
channels; allow Regional Bell Operating Companies (RBOC's) to sell long-distance
services, under certain conditions; require local telcos to open their networks
to competitors; and allow RBOCs to manufacture customer equipment. The
Corporation believes that competition among customer groups (CATV operators and
telcos, competing to build networks and offer similar services, could benefit
the Corporation as a key equipment provider for those networks.
While the Telecommunications Act of 1996 was viewed by many in the domestic
communications industry as the necessary catalyst to opening a robust network
building cycle in the United States, the Corporation has not seen a significant
increase in orders directly attributable to the benefits described above. The
Corporation's domestic sales did increase 26% for fiscal year 1997 over sales
for the previous fiscal year, but the majority came from traditional domestic
cable operators. The Corporation believes the increase was a result of network
upgrade activity, by new and existing customers, to enhance capacity with
expanded bandwidth products. The push to upgrade networks is being driven by
demand for increased and improved services, affecting not only video and voice
requirements, but also demand for two-way, high-speed, data.
International demand for advanced services is increasing as well, as mature
markets are deregulating and emerging economies are seeking to expand their
communications capabilities. The Corporation sees the international markets as a
key growth area now, and in the future and will continue to pursue opportunities
in the international markets.
Employees
The Corporation had approximately 1,200 employees as of September 5, 1997, of
whom approximately 70% were engaged in manufacturing, inspection, and quality
control activities. The remainder were engaged in executive, administrative,
sales, product development, research, and technical customer services
activities. The technical staff includes 103 employees with baccalaureate or
more advanced degrees in engineering or other technical disciplines, and an
additional 304 persons with at least two years of technical college or military
education equivalent to a two-year degree. None of the employees are represented
by a collective bargaining representative.
Suppliers
The Corporation closely monitors supplier delivery performance and quality and
employs a strategy of limiting the total number of suppliers to those who are
quality leaders in their respective specialties and who will work with the
Corporation as partners in the supply function. Typical items purchased are die
cast aluminum housings, RF hybrids, printed circuit boards, fiber optic laser
transmitter assemblies, and standard electronic components. Although a few of
the components used by the Corporation are single-sourced, the Corporation has
experienced no significant difficulties to date in obtaining adequate quantities
of raw materials and component parts.
In fiscal year 1997, the Corporation continued its implementation of process
changes focused on order fulfillment. The goal of this corporate-wide effort has
been to reduce cycle time throughout the manufacturing process, reduce
inventory, improve productivity, and enhance product quality.
Key to the success of inventory reduction is the implementation of in-house
vendor supply relationships. Through this method, the Corporation can gain
access to key parts needed in the manufacturing process on a "just-in-time"
basis. The Corporation has implemented a number of in-house vendor supply
relationships to date.
DISCONTINUED OPERATIONS
Digital Fiber Optics Transmission Products Segment
On July 10, 1997, the Corporation announced its intent to discontinue its
Digital Fiber Optics Transmission Products segment in a phase-down process
expected to span nine months. The Digital Fiber Optics Transmission Products
segment provided products for long-distance, point-to-point video, voice and
data signal transmission applications, primarily for telephony, distance-
learning and other non-CATV markets. Customers were primarily telcos, major
broadcast companies and educational institutions. The decision to discontinue
this segment was based on an assessment of the potential return on continued
funding of product development for the Corporation's proprietary digital
technology versus other opportunities for investments in the Corporation's core
business, especially AM fiber optics technology.
Research and development expenditures for this segment were $4,005,000,
$4,544,000, and $2,836,000 in fiscal years 1997, 1996 and 1995, respectively.
This business segment has been accounted for as a discontinued business segment
in fiscal year 1997, and its results have been excluded from continuing
operations for all periods presented in the Corporation's fiscal year 1997
consolidated financial statements, incorporated herein by reference to pages 21
through 34 of the Registrant's 1997 Annual Report to Shareholders.
Additional information regarding discontinued operations and segment performance
is incorporated by reference to Notes B (Discontinued Operations) and R (Segment
Information) on pages 26 and 32 of the Registrant's 1997 Annual Report to
Shareholders.
Item 2. Properties
The Corporation operates the following principal facilities:
Approximate (O)Owned
Location Principal Use Square Feet (L)Leased
State College, Pennsylvania Administrative Offices
and Manufacturing 133,000 O
Tipton, Pennsylvania Manufacturing 45,000 O
Reedsville, Pennsylvania Manufacturing 60,000 L
Tijuana, Mexico Manufacturing 25,200 L
Almere, The Netherlands Administrative Offices 14,100 L
Ajax, Ontario, Canada Administrative Offices 5,000 L
The Corporation believes its current facilities are well maintained and in good
operating condition, and that such facilities are sufficient for its present
operations.
Item 3. Legal Proceedings
On or about March 31, 1995, James and Elizabeth McCarthy, who own 150 shares of
the Registrant's Common Stock, filed a complaint in the United States District
Court for the Eastern District of Pennsylvania against the Corporation and its
then Chief Executive Officer, Richard E. Perry, alleging that, during the period
January 17, 1995, through March 24, 1995, the defendants knowingly or recklessly
omitted material information about the Registrant in violation of Sections 10
(b) and 20 (a) of the Securities Exchange Act of 1934 and common law. The
complaint seeks permission to proceed as a class action on behalf of certain
persons who purchased shares of the Registrant's Common Stock during the period
January 17, 1995, through March 24, 1995, and who were allegedly damaged. The
complaint seeks compensatory damages in an unspecified amount and costs and
expenses relating to the complaint, including reasonable attorney's fees. On May
26, 1995, the Corporation filed a motion to dismiss the complaint which was
denied in part and granted in part on December 28, 1995. Plaintiffs have filed a
motion for class certification, and the Corporation is preparing its opposition.
Discovery has commenced, but a trial date has not yet been set.
On September 17, 1997, a tenative settlement was reached in this matter which,
subject to completion of documentation and approval by the Court, would require
the Corporation to make a payment in the first or second quarter of fiscal year
1998 of an amount that (net of insurance proceeds) is not expected to have a
material adverse effect on the Corporation's results of operations for such
periods.
Item 4. Submission of Matters to a Vote of Securities Holders
There were no matters submitted to a vote of security holders during the fourth
quarter of the fiscal year ended June 27, 1997.
Executive Officers of the Registrant
All executive officers of the Corporation are elected annually at the Annual
Meeting of the Board of Directors (which is normally held on the date of the
Annual Meeting of Shareholders of the Corporation) to serve in their office for
the next succeeding year and until their successors are duly elected and
qualified. The listing immediately following this paragraph gives certain
information about the Corporation's executive officers, including the age,
present position, and business experience during the past five years.
Name Age Position/Experience
Richard E. Perry 67 Chairman since June 1986; Chief Executive
Officer from July 1985 to August 1996;
President from July 1985 through December
1992.
Scott C. Chandler 36 President and Chief Executive Officer since
August 1996. Vice President-General Manager,
U S WEST Cable & Multimedia, Regional Bell
Operating Company (RBOC), from September
1995 to August 1996; Vice President-General
Manager, !NTERPRISE America, a subsidiary of
U S WEST Communications (RBOC), from January
1994 to August 1995; Director-Vendor
Relations/Channel Support, !NTERPRISE
Networking Services, a subsidiary of U S WEST
Communications (RBOC), from January 1992 to
December 1993; Director, Market Strategy
Development, U S WEST, Inc., (RBOC), from
June 1990 to December 1991.
Edwin S. Childs 58 Vice President-Human Resources since August
1996; Director, Human Resources from
September 1986 to July 1996.
David J. Eng 44 Sr. Vice President-Worldwide Sales since
March 1997; Vice President - Sales, North,
Central and South America from August 1996 to
March 1997; Vice President-Sales & Marketing
from August 1994 to August 1996. Director,
Regional Telephony Sales, Scientific Atlanta,
Inc. from March 1993 to July 1994; Regional
Sales Manager, Scientific Atlanta, Inc. from
April 1985 to February 1993.
Lawrence R. Fisher, Jr. 47 Vice President-Engineering since August 1996;
Director, RF Engineering Product Development
from June 1995 to July 1996; Manager, RF
Engineering from June 1994 to May 1995.
Director of Engineering, Calan, Inc. from
January 1993 to May 1994. Vice President,
Bulick & Fisher Sales Associates from March
1990 to December 1992.
Chris A. Miller 44 Vice President-Finance, Secretary and
Treasurer since July 1995; Controller,
Planning Manager and Assistant Secretary from
February 1993 to July 1995; Controller and
Assistant Secretary from February 1987 to
February 1993.
Donald F. Miller 55 Vice President-Operations & Manufacturing
since August 1995; Plant Manager from
September 1987 to August 1995.
Gerhard B. Nederlof 49 Sr. Vice President, Marketing, Business
Development and Services since March 1997;
Vice President-Sales, Europe and Pacific Rim
from August 1996 to March 1997; Vice
President-International from January 1992 to
August 1996. Managing Director of DataCable
B.V. from November 1981 to January 1992.
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
The information required by this item is incorporated herein by reference to
page 36 of the Registrant's 1997 Annual Report to Shareholders under the caption
"Stock Listing."
Item 6. Selected Financial Data
The information required by this item is incorporated herein by reference to
the inside cover of the Registrant's 1997 Annual Report to Shareholders.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information required by this item is incorporated herein by reference to
pages 17 through 20 of the Registrant's 1997 Annual Report to Shareholders.
Item 8. Financial Statements and Supplementary Data
The information required by this item is incorporated herein by reference to
pages 21 through 34 of the Registrant's 1997 Annual Report to Shareholders.
Item 9. Changes and Disagreements on Accounting and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
The information with respect to Directors required by this item is incorporated
herein by reference to pages 2 and 3 of the Registrant's Proxy Statement dated
September 15, 1997.
The information with respect to Executive Officers required by this item is set
forth in Part I of this report.
To the Corporation's knowledge, based soley on a review of the copies of such
reports furnished to the Corporation and written representations, and no other
reports were required during the fiscal year ended June 27, 1997, its officers,
directors, and ten-percent shareholders complied with all applicable Section
16(a) filing requirements, except that Mr. Chandler filed a single report on
Form 4 approximately one month late to report a single purchase of approximately
2,500 shares of the Corporation's Common Stock shortly after he became President
and Chief Executive Officer of the Corporation.
Item 11. Executive Compensation
The information required by this item is incorporated herein by reference to
pages 6 through 12 of the Registrant's Proxy Statement dated September 15, 1997.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated herein by reference to
pages 4 and 6 of the Registrant's Proxy Statement dated September 15, 1997.
Item 13. Certain Relationships and Related Transactions
The Registrant had no related transactions or relationships requiring disclosure
under Regulation S-K, Item 404, during the fiscal year 1997.
PART IV
ITEM 14. Exhibits, Financial Statements and Reports on Form 8-K
(a) The following documents are filed as part of this report:
(1) As indicated in Item 8 of Part II, the following
consolidated financial statements of the Registrant included in
the Registrant's 1997 Annual Report to Shareholders for the
year ended June 27, 1997, are incorporated by reference to
pages 21 through 34 of the Registrant's Annual Report to
Shareholders.
Consolidated Balance Sheets -- Years ended June 27, 1997, and
June 28, 1996.
Consolidated Statements of Operations -- Years ended June 27,
1997, June 28, 1996, and June 30, 1995.
Consolidated Statements of Cash Flows -- Years ended June 27,
1997, June 28, 1996, and June 30, 1995.
Consolidated Statements of Shareholders' Equity -- Years ended
June 27, 1997, June 28, 1996, and June 30, 1995.
Notes to Consolidated Financial Statements.
Report of KPMG Peat Marwick LLP.
(2) The following financial statement schedule of the Registrant is
filed as a part of this report:
Schedule II -- Valuation and Qualifying Accounts
Report of KPMG Peat Marwick LLP
Schedules, other than the one listed above, have been omitted
because they are not applicable or the required information is
shown in the consolidated financial statements or notes thereto.
(3) Exhibits
NUMBER DESCRIPTION OF DOCUMENTS
(3) (a) Restated Articles of Incorporation of Registrant (incorporated by reference to Exhibit
3-a.1. to Amendment No. 2 to Form S-1 Registration Statement, File No. 2-70661).
(3) (b) Amendment to Articles of Incorporation of Registrant, filed September 21, 1995
(incorporated by reference to Exhibit (3) (b) of Registrant's Form 10-K for the year
ended June 30, 1995, Securities and Exchange Commission File No. 0-10726).
(3) (c) Bylaws of Registrant, as amended October 27, 1987, (incorporated by reference to Exhibit
(3) (b) to the Registrant's Form 10-K for the year ended June 30, 1988, Securities and
Exchange Commission File No., 0-10726).
(4) Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4 to Amendment
No. 1 of Form S-1 Registration Statement, File No. 2-70661).
(10) (a) Deferred Compensation Plan between the Registrant and Richard E. Perry dated December 6,
1989, (incorporated by reference to Exhibit (10) (y) to the Registrant's Form 10-K for
the year ended June 30, 1990, Securities and Exchange Commission File No. 0-10726).
(10) (b) 1989 Non-Employee Directors' Non-Qualified Stock Option Plan (incorporated by reference
to Exhibit 28 to Form S-8 Registration Statement, File No. 33-35208).
(10) (c) Employment Agreement dated January 1, 1992, between the Registrant and Gerhard B.
Nederlof (incorporated by reference to Exhibit (10) (v) to the Registrant's Form 10-K for
the year ended June 26, 1992, Securities and Exchange Commission File No. 0-10726).
(10) (d) Indemnification Agreement dated February 3, 1992, between the Registrant and Gerhard B.
Nederlof (incorporated by reference to Exhibit (10) (gg) to the Registrant's Form 10-K
for the year ended June 26, 1992, Securities and Exchange Commission File No. 0-10726).
(10) (e) Supplemental Retirement Plan Participation Agreement dated April 20, 1993, between the
Registrant and Gerhard B. Nederlof (incorporated by reference to Exhibit (10) (bb) to the
Registrant's Form 10-K for the year ended June 25, 1993, Securities and Exchange
Commission File No. 0-10726).
(10) (f) Change of Control Agreement dated May 21, 1993, between the Registrant and Gerhard B.
Nederlof (incorporated by reference to Exhibit (10) (gg) to the Registrant's Form 10-K
for the year ended June 25, 1993, Securities and Exchange Commission File No. 0-10726).
(10) (g) Change of Control Agreement dated August 22, 1994, between the Registrant and David J.
Eng (incorporated by reference to Exhibit (10) (oo) to the Registrant's Form 10-K for the
year ended June 24, 1994, Securities and Exchange Commission File No. 0-10726).
(10) (h) Form of Indemnification Agreement dated August 22, 1994, between the Registrant and David
J. Eng (incorporated by reference to Exhibit (10) (pp) to the Registrant's Form 10-K for
the year ended June 24, 1994, Securities and Exchange Commission File No. 0-10726).
(10) (i) Supplemental Retirement Plan Participation Agreement dated August 22, 1994, between the
Registrant and David J. Eng (incorporated by reference to Exhibit (10) (qq) to the
Registrant's Form 10-K for the year ended June 24, 1994, Securities and Exchange
Commission File No. 0-10726).
(10) (j) Change of Control Agreement dated May 23, 1995, between the Registrant and Joseph E.
Zavacky (incorporated by reference to Exhibit (10) (gg) to the Registrant's Form 10-K for
the year ended June 30, 1995, Securities and Exchange Commission File No. 0-10726).
(10) (k) Form of Indemnification Agreement dated May 23, 1995, between the Registrant and Joseph
E. Zavacky (incorporated by reference to Exhibit (10) (hh) to the Registrant's Form 10-K
for the year ended June 30, 1995, Securities and Exchange Commission File No. 0-10726).
(10) (l) Supplemental Retirement Plan Participation Agreement dated May 22, 1995, between the
Registrant and Chris A. Miller (incorporated by reference to Exhibit (10) (ii) to the
Registrant's Form 10-K for the year ended June 30, 1995, Securities and Exchange
Commission File No. 0-10726).
(10) (m) Change of Control Agreement dated May 22, 1995, between the Registrant and Chris A.
Miller (incorporated by reference to Exhibit (10) (jj) to the Registrant's Form 10-K for
the year ended June 30, 1995, Securities and Exchange Commission File No. 0-10726).
(10) (n) Form of Indemnification Agreement dated May 22, 1995, between the Registrant and Chris A.
Miller (incorporated by reference to Exhibit (10) (kk) to the Registrant's Form 10-K for
the year ended June 30, 1995, Securities and Exchange Commission File No. 0-10726).
10) (o) Supplemental Retirement Plan Participation Agreement dated August 24, 1995, between the
Registrant and Donald F. Miller (incorporated by reference to Exhibit (10) (ll) to the
Registrant's Form 10-K for the year ended June 30, 1995, Securities and Exchange
Commission File No. 0-10726).
(10) (p) Change of Control Agreement dated August 24, 1995, between the Registrant and Donald F.
Miller (incorporated by reference to Exhibit (10) (mm) to the Registrant's Form 10-K for
the year ended June 30, 1995, Securities and Exchange Commission File No. 0-10726).
(10) (q) Form of Indemnification Agreement dated August 24, 1995, between the Registrant and
Donald F. Miller (incorporated by reference to Exhibit (10) (nn) to the Registrant's Form
10-K for the year ended June 30, 1995, Securities and Exchange Commission File No.
0-10726).
(10) (r) Lease Agreement dated November 10, 1994, between the Registrant and Mifflin County
Industrial Development Corporation for a manufacturing building (incorporated by
reference to Exhibit (10) (oo) to the Registrant's Form 10-K for the year ended June 30,
1995, Securities and Exchange Commission File No. 0-10726).
(10) (s) Registrant's Retirement Savings and Profit Sharing Plan as Amended July 1, 1989, and
including amendments through April 19, 1994. (incorporated by reference to Exhibit
99.B14 to Form S-8 Registration Statement, File No. 333-02505).
(10) (t) Supplemental Retirement Plan Participation Agreement dated August 13, 1996, between the
Registrant and Edwin S. Childs. (incorporated by reference to Exhibit (10) (x) to the
Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange
Commission File No. 0-10726).
(10) (u) Change of Control Agreement dated August 13, 1996, between the Registrant and Edwin S.
Childs. (incorporated by reference to Exhibit (10) (y) to the Registrant's Form 10-K for
the year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (v) Form of Indemnification Agreement dated August 13, 1996, between the Registrant and Edwin
S. Childs. (incorporated by reference to Exhibit (10) (z) to the Registrant's Form 10-K
for the year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (w) Supplemental Retirement Plan Participation Agreement dated August 13, 1996, between the
Registrant and Lawrence R. Fisher, Jr. (incorporated by reference to Exhibit (10) (aa) to
the Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange
Commission File No. 0-10726).
(10) (x) Change of Control Agreement dated August 13, 1996, between the Registrant and Lawrence R.
Fisher, Jr. (incorporated by reference to Exhibit (10) (bb) to the Registrant's Form 10-K
for the year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (y) Form of Indemnification Agreement dated August 13, 1996, between the Registrant and
Lawrence R. Fisher, Jr. (incorporated by reference to Exhibit (10) (cc) to the Registrant's
Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission File No.
0-10726).
(10) (z) Amended and Restated Employment Agreement dated October 16, 1995, between the Registrant
and Richard E. Perry. (incorporated by reference to Exhibit (10) (dd) to the Registrant's
Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission File No.
0-10726).
(10) (aa) Employment Agreement dated July 2, 1996, between the Registrant and Scott C. Chandler.
(incorporated by reference to Exhibit (10) (ee) to the Registrant's Form 10-K for the
year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (bb) Registrant's Supplemental Executive Retirement Plan effective May 1, 1996. (incorporated
by reference to Exhibit (10) (ff) to the Registrant's Form 10-K for the year ended June
28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (cc) Note and Security Agreement effective November 2, 1995, between the Registrant and Mellon
Bank, N.A. (incorporated by reference to Exhibit (10) (gg) to the Registrant's Form 10-K
for the year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (dd) Supplement to Note and Security Agreement effective November 2, 1995, between the
Registrant and Mellon Bank, N.A. (incorporated by reference to Exhibit (10) (hh) to the
Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange
Commission File No. 0-10726).
(10) (ee) Revolving Line of Credit Agreement effective November 2, 1995, between the Registrant and
Mellon Bank, N.A. (incorporated by reference to Exhibit (10) (ii) to the Registrant's
Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission File No.
0-10726).
(10) (ff) Supplement to Revolving Line of Credit Agreement effective November 2, 1995, between the
Registrant and Mellon Bank, N.A. (incorporated by reference to Exhibit (10) (jj) to the
Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission
File No. 0-10726).
(10) (gg) (i) 1988 Stock Option Plan. (incorporated by reference to Exhibit (10) (kk)(i) to the Registrant's
Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (gg) (ii) Amendment to 1988 Stock Option Plan. (incorporated by reference to Exhibit (10) (kk)(ii) to the
Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission
File No. 0-10726).
(10) (hh) (i) 1992 Stock Purchase Plan. (incorporated by reference to Exhibit (10) (ll)(i) to the Registrant's
Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission File No. 0-10726).
(10) (hh) (ii) Amendment to 1992 Stock Purchase Plan. (incorporated by reference to Exhibit (10) (ll)(ii) to
the Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission
File No. 0-10726).
(10) (ii) Fiscal Year 1997 Profit Incentive Plan. (incorporated by reference to Exhibit (10) (mm) to the
Registrant's Form 10-K for the year ended June 28, 1996, Securities and Exchange Commission
File No. 0-10726).
(10) (jj) Note and Security Agreement effective November 14, 1996, between the Registrant and Mellon
Bank, N.A.
(10) (kk) Supplement to Note and Security Agreement effective November 14, 1996, between the
Registrant and Mellon Bank, N.A.
(10) (ll) Revolving Line of Credit Agreement effective November 14, 1996, between the Registrant and
Mellon Bank, N.A.
(10) (mm) Supplement to Revolving Line of Credit Agreement effective November 14, 1996, between the
Registrant and Mellon Bank, N.A.
(10) (nn) Amended and Restated Employment Agreement dated July 21, 1997, between the Registrant
and Richard E. Perry.
(10) (oo) Amended and Restated Employment Agreement dated July 30, 1997, between the Registrant
and Gerhard B. Nederlof.
(11) Statement re Computation of Earnings Per Share.
(13) Annual Report to Shareholders for the year ended June 27, 1997.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Auditors.
(27) Financial Data Schedule.
(b) Reports on Form 8-K filed in the fourth quarter of the fiscal year 1997:
None.
(c) Exhibits: See (a) (3) above.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
C-COR ELECTRONICS, INC.
(Registrant)
September 25, 1997
/s/ Scott C. Chandler, President and
Chief Executive Officer
(principal executive officer)
/s/ Chris A. Miller, Vice President-Finance,
Secretary and Treasurer (principal
financial officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on the 25th day of September 1997.
/s/ Richard E. Perry, Director, Chairman
/s/ Donald M. Cook, Jr., Director
/s/ I. N. Rendall Harper, Jr., Director
/s/ Anne P. Jones, Director
/s/ John J. Omlor, Director
/s/ Frank Rusinko, Jr., Director
/s/ James J. Tietjen, Director
/s/ Philip L. Walker, Jr., Director
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
COL. A COL. B COL. C COL. D COL. E
ADDITIONS
DESCRIPTION Balance Charged Charged to Balance
at Beginning to Costs Other Accounts- Deductions- at End
of Period and Expenses Describe Describe of Period
- -----------------------------------------------------------------------------------------------------------------------------
Year ended June 27, 1997
Reserves deducted from assets to
which they apply:
Allowance for Doubtful Accounts $ 355,000 $ 157,000 $0 $ 2,000(1) $ 510,000
Inventory Reserve-Continuing Operations 1,112,000 1,323,000 0 1,202,000(2) 1,233,000
Inventory Reserve-Discontinued
Operations 305,000 3,418,000 0 93,000(2) 3,630,000
- ------------------------------------------------------------------------------------------------------------------------------
$1,772,000 $ 4,898,000 $0 $ 1,297,000 $ 5,373,000
- ------------------------------------------------------------------------------------------------------------------------------
Reserves not deducted from assets:
Product Warranty Reserve-Continuing
Operations $1,724,000 $ 2,310,000 $0 $ 1,849,000(3) $ 2,185,000
Product Warranty Reserve-Discontinued
Operations 0 4,028,000 0 599,000(3) 3,429,000
Workers' compensation self-insurance 704,000 1,068,000 0 610,000(4) 1,162,000
Allowance for Discontinued Operations 0 3,375,000 0 0 3,375,000
- ------------------------------------------------------------------------------------------------------------------------------
$2,428,000 $10,781,000 $0 $ 3,058,000 $10,151,000
- ------------------------------------------------------------------------------------------------------------------------------
Year ended June 28, 1996
Reserves deducted from assets to
which they apply:
Allowance for Doubtful Accounts $ 657,000 $ 0 $0 $ 302,000(1) $ 355,000
Inventory Reserve-Continuing Operations 949,000 819,000 0 656,000(2) 1,112,000
Inventory Reserve-Discontinued
Operations 500,000 273,000 0 468,000(2) 305,000
- ------------------------------------------------------------------------------------------------------------------------------
$2,106,000 $ 1,092,000 $0 $ 1,426,000 $ 1,772,000
- ------------------------------------------------------------------------------------------------------------------------------
Reserves not deducted from assets:
Product Warranty Reserve-Continuing
Operations $1,751,000 $ 1,981,000 $0 $ 2,008,000(3) $ 1,724,000
Workers' compensation self-insurance 553,000 653,000 0 502,000(4) 704,000
- ------------------------------------------------------------------------------------------------------------------------------
$2,304,000 $ 2,634,000 $0 $ 2,510,000 $ 2,428,000
- ------------------------------------------------------------------------------------------------------------------------------
Year ended June 30, 1995
Reserves deducted from assets to
which they apply:
Allowance for Doubtful Accounts $ 348,000 $ 313,000 $0 $ 4,000(1) $ 657,000
Inventory Reserve-Continuing Operations 497,000 546,000 0 94,000(2) 949,000
Inventory Reserve-Discontinued
Operations 151,000 731,000 0 382,000(2) 500,000
- ------------------------------------------------------------------------------------------------------------------------------
$ 996,000 $ 1,590,000 $0 $ 480,000 $ 2,106,000
- ------------------------------------------------------------------------------------------------------------------------------
Reserves not deducted from assets:
Product Warranty Reserve-Continuing
Operations $ 602,000 $ 2,355,000 $0 $ 1,206,000(3) $ 1,751,000
Workers' compensation self-insurance 0 665,000 0 112,000(4) 553,000
- ------------------------------------------------------------------------------------------------------------------------------
$ 602,000 $ 3,020,000 $0 $ 1,318,000 $ 2,304,000
- ------------------------------------------------------------------------------------------------------------------------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Inventory disposals.
(3) Warranty claims honored during year.
(4) Worker's compensation claims paid.
Note: Unless otherwise indicated, reserves relate to continuing operations