-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RVIppbQfThd+O59F8lpUOu5XPzPOE0wGl9te/SA5sNFU+jNuSo0XpGhtu64kB4Cs AHlXpf0XmQVI6WyhrxVyPw== 0000946550-97-000001.txt : 19970222 0000946550-97-000001.hdr.sgml : 19970222 ACCESSION NUMBER: 0000946550-97-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CTC COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000764841 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 042731202 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13627 FILM NUMBER: 97527462 BUSINESS ADDRESS: STREET 1: 360 SECOND AVE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6174668080 MAIL ADDRESS: STREET 1: 360 SECOND AVENUE CITY: WALTHAM STATE: MA ZIP: 02154 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER TELEPHONE CORP DATE OF NAME CHANGE: 19920703 10-Q 1 12/31/96 10-Q 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. CTC COMMUNICATIONS CORP. FORM 10-Q INDEX 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
The Company did not file any reports on Form 8-K during the three months ended December 31, 1996. 2 CTC COMMUNICATIONS CORP. CONDENSED BALANCE SHEETS
December 31, March 31, 1996 1996 --------------- -------------- ASSETS Current Assets 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 ============= =============
The accompanying notes are an integral part of these financial statements. 3 CTC COMMUNICATIONS CORP. CONDENSED STATEMENTS OF INCOME
Three Months Ended December 31, December 31, 1996 1995 ------------- ------------- Revenue 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 ============= =============
The accompanying notes are an integral part of these financial statements. 4 CTC COMMUNICATIONS CORP. CONDENSED STATEMENTS OF INCOME
Nine Months Ended December 31, December 31, 1996 1995 ------------- ------------- Revenue 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 ============= =============
The accompanying notes are an integral part of these financial statements. 5 CTC COMMUNICATIONS CORP. CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended December 31, December 31, 1996 1995 ------------- ------------- OPERATING ACTIVITIES 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 ============= =============
The accompanying notes are an integral part of these financial statements. 6 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 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 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 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 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 EX-3.1 2 ARTICLES OF ORGANIZATION, AS AMENDED 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 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. 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:
WITHOUT PAR VALUE WITH PAR VALUE ----------------- -------------- CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE - -------------- ---------------- ---------------- --------- Preferred None 1,000,000 $1.00 Common None 25,000,000 $ .01
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. 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. 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. (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 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 EX-11 3 Exhibit 11 CTC COMMUNICATIONS CORP. STATEMENTS REGARDING COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS EXCEPT FOR PER SHARE DATA)
Three Months Ended Nine Months Ended December 31, December 31, December 31, December 31, 1996 1995 1996 1995 ------------- ------------- ------------- ------------- PRIMARY 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 ---------- ---------- ---------- ----------
EX-27 4 FDS FOR 3RD QTR ENDING 12/31/96
5 1,000 9-MOS MAR-31-1997 DEC-31-1996 4,662 0 9,382 190 2 14,738 6,707 5,330 16,507 3,551 0 0 0 96 12,996 16,507 28,818 2,963 6,094 23,152 0 0 10 5,801 2,399 3,402 0 0 0 3,402 0.31 0.31
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