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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
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FORM 10-Q
(Mark One)
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
[ ] 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 0-27312
TOLLGRADE COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
PENNSYLVANIA 25-1537134
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
493 NIXON RD.
CHESWICK, PA 15024
(Address of Principal Executive Offices, including zip code)
412-274-2156
(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 _______
As of August 9, 1996, there were 5,480,149 shares of the Registrant's
Common Stock, $0.20 par value per share, and no shares of the Registrant's
Preferred Stock, $1.00 par value per share, outstanding.
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This report consists of a total of 27 pages. The exhibit index is at page 15.
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TOLLGRADE COMMUNICATIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE NO.
ITEM 1 -- CONSOLIDATED FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1996
AND DECEMBER 31,1995 ......................................................................3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX-MONTH
PERIODS ENDED JUNE 30, 1996 AND JUNE 30, 1996..............................................4
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH
PERIODS ENDED JUNE 30, 1996 AND JUNE 30, 1995 .............................................5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................................................6
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION......................................................7
PART II. OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS.........................................................................12
ITEM 2 -- CHANGES IN SECURITIES.....................................................................12
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES...........................................................12
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................................13
ITEM 5 -- OTHER INFORMATION.........................................................................13
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K..........................................................13
SIGNATURE...............................................................................................14
EXHIBIT INDEX...........................................................................................15
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PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
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TOLLGRADE COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
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(UNAUDITED)
JUNE 30, 1996 DECEMBER 31, 1995
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,668,691 $15,157,387
Short Term Investments 6,942,506 --
Accounts receivable:
Trade 3,625,980 2,571,233
Other 115,512 59,887
Inventories 7,134,461 6,021,466
Prepaid expenses and deposits 333,830 151,451
Deferred tax asset 185,000 159,500
----------- -----------
Total current assets 27,005,980 24,120,824
Property and equipment, net 2,198,247 1,457,677
Deferred tax asset 40,759 80,100
Patents and other assets 78,222 69,402
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TOTAL ASSETS $29,323,208 $25,728,103
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,510,457 $ 1,967,445
Accrued expenses 893,958 347,947
Royalties payable 974,185 561,436
Income taxes payable 632,459 84,800
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TOTAL CURRENT LIABILITIES 4,011,059 2,961,628
Deferred tax liability 140,000 157,100
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TOTAL LIABILITIES 4,151,059 3,118,728
SHAREHOLDERS' EQUITY:
Common stock, $.20 par value; authorized shares, 7,000,000;
issued and outstanding 5,448,709 and 5,443,830, respectively 1,089,742 1,088,766
Additional paid-in capital 22,299,557 22,339,022
Unearned compensation (136,930) (168,529)
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Retained earnings (accumulated deficit) 1,919,780 (649,884)
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TOTAL SHAREHOLDERS' EQUITY 25,172,149 22,609,375
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $29,323,208 $25,728,103
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The accompanying notes are an integral part of this statement.
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TOLLGRADE COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
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REVENUES:
Product sales $10,182,286 $5,540,837 $17,031,092 $11,335,798
Royalty fees -- 1,125 580 2,111
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TOTAL REVENUES 10,182,286 5,541,962 17,031,672 11,337,909
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COST OF PRODUCT SALES 4,971,735 2,711,210 8,435,098 5,823,418
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GROSS PROFIT 5,210,551 2,830,752 8,596,574 5,514,491
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OPERATING EXPENSES:
Selling and marketing 1,258,889 711,229 2,150,860 1,332,440
General and administrative 595,645 380,692 1,075,029 710,772
Research, engineering and development 878,394 603,708 1,591,691 1,127,724
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TOTAL OPERATING EXPENSES 2,732,928 1,695,629 4,817,580 3,170,936
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INCOME FROM OPERATIONS 2,477,623 1,135,123 3,778,994 2,343,555
Interest income (expense) 184,294 19,004 388,672 (17,663)
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INCOME BEFORE INCOME TAXES 2,661,917 1,154,127 4,167,666 2,325,892
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Provision for income taxes 1,050,000 415,521 1,598,000 837,321
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NET INCOME $ 1,611,917 738,606 2,569,666 1,488,571
EARNINGS PER SHARE INFORMATION:
Weighted fully diluted common
and common equivalent shares 5,942,000 4,548,000 5,938,000 4,548,000
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Net income per common and common equivalent shares:
Primary $ .27 $ .16 $ .44 $ .33
Fully Diluted $ .27 $ .16 $ .43 $ .33
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The accompanying notes are an integral part of this statement.
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TOLLGRADE COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
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SIX MONTHS ENDED JUNE 30,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,569,666 1,488,571
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 234,031 118,281
Compensation expense for restricted stock 31,599 21,864
Changes in assets and liabilities:
(Increase) decrease in accounts receivable-trade (1,054,747) (770,755)
(Increase) decrease in accounts receivable-other (55,625) 84,875
(Increase) decrease in inventories (1,112,995) (772,419)
(Increase) decrease in prepaid expenses and deposits (182,379) (51,920)
(Increase) decrease in other assets (8,820) --
Increase (decrease) in accounts payable (456,988) 415,846
Increase (decrease) in accrued expense and royalties payable 958,760 386,583
Increase (decrease) in deferred income taxes 8,400 370,800
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Increase (decrease) in income taxes payable 547,659 433,038
Net cash provided by operating activities 1,478,561 1,724,764
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CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption (purchase) of short-term investments (6,942,506) 78
Capital expenditures (992,861) (267,193)
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Net cash used in investing activities (7,935,367) (267,115)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under line of credit -- (865,719)
Payments on long-term debt -- (1,800,000)
Purchase of stock warrants -- (1,253,708)
Proceeds from issuance of common stock, net of issuance costs 17,400 2,828,752
IPO issuance cost (49,290) --
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NET CASH USED IN FINANCIAL ACTIVITIES (31,890) (1,090,675)
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Net increase (decrease) in cash and cash equivalents (6,488,696) 366,974
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Cash and cash equivalents at beginning of period 15,157,387 740,013
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Cash and cash equivalents at end of period $ 8,668,691 $ 1,106,987
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The accompanying notes are an integral part of this statement.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements included herein
have been prepared by Tollgrade Communications, Inc. (the "Company") in
accordance with generally accepted accounting principles for the interim
financial information and Article 10 of Regulation S-X. The financial
statements as of and for the three and six-month periods ended June 30, 1996
should be read in conjunction with the Company's financial statements (and
notes thereto) included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1995. Accordingly, the accompanying statements do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements, although the Company
believes that the disclosures are adequate to make the information presented
not misleading. In the opinion of the Company's management, all adjustments
considered necessary for a fair presentation of the accompanying consolidated
financial statements have been included, and all adjustments are of a normal
and recurring nature. Operating results for the three and six-month periods
ended June 30, 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
2. INVENTORY
At June 30, 1996 and December 31, 1995 inventory consisted of the following:
June 30, December 31,
1996 1995
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Raw materials ............................................. $3,256,127 $2,577,638
Work in progress .......................................... 2,078,253 1,730,364
Finished goods ............................................ 1,800,081 1,713,464
---------- ----------
$7,134,461 $6,021,466
========== ==========
3. SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS -
SUBSEQUENT EVENT
In order to protect shareholder value in the event of an unsolicited offer to
acquire the Company, on July 23, 1996, the Board of Directors of the Company
declared a dividend of one preferred share purchase right for each outstanding
share of common stock. The dividend is payable on August 15, 1996 to
shareholders of record as of that date. The aforementioned rights are
exercisable only if a person or group acquires or announces an offer to acquire
20% or more of the Company's common stock. The Company is presently unaware of
any such action.
For a detailed discussion of the terms and conditions of such rights, refer to
Part II, Item 2 of this Form 10-Q and to forms referenced therein.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes thereto appearing elsewhere in this report.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
The statements contained in the following Management's Discussion and Analysis
of Results of Operations and Financial Condition which are not historical are
"forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements represent the
Company's present expectations or beliefs concerning future events. The Company
cautions that such statements are qualified by important factors that could
cause actual results to differ materially from those in the forward looking
statements. Results actually achieved thus may differ materially from expected
results included in these statements.
OVERVIEW
The Company was organized in 1986 and began operations in 1988. The Company
designs, engineers, markets and supports proprietary products which enable
telephone companies to use their existing line test systems to remotely
diagnose problems in Plain Old Telephone Systems' (POTS) lines containing both
copper and fiber optics. The Company's MCU(R) product line, which includes POTS
line testing as well as alarm-related products, represented approximately 95%
of the Company's revenue for the second quarter ended June 30, 1996 and will
continue to account for a majority of the Company's revenues for the
foreseeable future.
The Company's product sales are primarily to the seven Regional Bell Operating
Companies ("RBOCs"). For the second quarter ended June 30, 1996, 92% of the
Company's total revenue was generated from sales to these seven RBOCs, the two
largest of which comprised 61% of revenues. The Company's operating results
have fluctuated and may continue to fluctuate as a result of various factors,
including the timing of orders from and shipments to the RBOCs.
Although international sales to date have not been significant, the Company
believes the international markets offer sales opportunities. The Company
intends to focus additional sales, marketing and development resources on
increasing its international presence; however, there can be no assurance that
these efforts will be successful or that the Company will achieve significant
international sales.
The Company believes that continued growth will depend on its ability to design
and engineer new products and, therefore, spends a significant amount on
research, engineering and development. Research, engineering and development
expenses as a percent of revenues were approximately 9% for the second quarter
ended June 30, 1996. The Company expects its research, engineering and
development expenses to continue at significant levels.
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RESULTS OF OPERATIONS - SECOND QUARTER
REVENUES
Revenue for the second quarter of 1996 increased 83.7%, or $4,640,324, to
$10,182,286 from $5,541,962 in the second quarter of 1995. The increase in
revenues for the second quarter was primarily attributable to an increase in
unit volume sales of the MCU(R) line testing and synchronization products as a
result of increased market penetration. MCU(R) line testing and synchronization
product's revenues increased 83.4%, or $4,166,510, in the second quarter of
1996 compared to the second quarter of 1995.
GROSS PROFIT
Gross profit increased 84.1% from $2,830,752 in the second quarter of 1995, to
$5,210,551 in the second quarter of 1996. The $2,379,799 second quarter
increase in gross profit was primarily attributable to an increase in revenues,
because the gross profit margin remained at approximately 51%.
SELLING & MARKETING EXPENSE
Selling and marketing expense in the second quarter of 1996 increased 77.0%, or
$547,660 to $1,258,889 from $711,229 in the second quarter of 1995. As a
percentage of revenues, selling and marketing expenses decreased to 12.4% in
the second quarter of 1996 from 12.8% in the second quarter of 1995. The
increase was due primarily to increased sales commissions resulting from higher
sales and increased expenses of developing international markets.
GENERAL & ADMINISTRATIVE EXPENSE
General and administrative expense in the second quarter of 1996 increased
56.5%, or $214,953, to $595,645 from $380,692 in the second quarter of 1995. As
a percentage of revenues, general and administrative expenses decreased to 5.8%
in the second quarter of 1996 from 6.9% in the second quarter of 1995. The
increase in this expense for each comparative period is largely attributable to
increased employee bonuses that are based on Company performance and to
increased costs including professional fees incurred as a result of being a
publicly owned company during the second quarter of 1996, but not during the
comparative period of 1995.
RESEARCH, ENGINEERING & DEVELOPMENT EXPENSE
Research, engineering and development expense in the second quarter of 1996
increased 45.5%, or $274,686 to $878,394 from $603,708 in the second quarter of
1995. As a percentage of revenues, research, engineering and development
expense decreased to 8.6% in the second quarter of 1996 from 10.9% in the
second quarter of 1995. The increase for each comparative period was primarily
due to increased personnel expenses such as recruiting and salaries for new
employees and to related expenditures for computers, software and equipment.
OTHER INCOME AND EXPENSE
Other income and expense consists primarily of interest income and interest
expense. Other income was $184,294 for the second quarter of 1996 compared to
other income of $19,004 for the quarter ended June 30, 1995. The increase in
other income was primarily attributable to the investment of the net proceeds
of $15.8 million from the Company's initial public offering in December 1995.
(See Liquidity and Capital Resources.)
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PROVISION FOR INCOME TAXES
The provision for income taxes for the second quarter of 1996 increased 153% or
$634,479 from $415,521 in the second quarter of 1995. The increase in the
provision for income taxes was primarily due to the increase in income from
operations and investment income. The effective tax rate also reflects the
unavailability of the credit for research and development expenses during the
period. Although this credit was recently reinstated through legislation, its
effect is only prospective.
NET INCOME
As a result of the above factors, net income increased 118.2% from $738,606 in
the three months ended June 30, 1995 to $1,611,917 in the second quarter of
1996.
RESULTS OF OPERATIONS - YEAR TO DATE
REVENUES
For the first six months of 1996, revenues totaled $17,031,672 compared to
$11,337,909 for the first six months of 1995, representing an increase of
$5,693,763 or 50.2%. The increase in revenues for the six month period was
primarily attributable to an increase in unit sales volume of the MCU(R) line
test products and also to a one time sale of a special application product to a
customer for the 1996 summer Olympic games of approximately $1.36 million.
MCU(R) line testing and synchronization product revenue increased 55.1%, or
$4,894,509 in the six month period ended June 30, 1996 compared to the same six
months of 1995.
GROSS PROFIT
For the first six months of 1996, gross profit increased to $8,596,574 compared
to $5,514,491 for the first six months of 1995, representing an increase of
$3,082,083, or 55.9%. As a percentage of revenues, gross profit increased to
50.5% in the first six months of 1996 compared to 48.6% in the same period for
1995. Factors contributing to the increase in gross profit were product sales
mix and the introduction of new products with higher gross profit margins.
SELLING & MARKETING EXPENSE
For the first six months of 1996, selling and marketing expense totaled
$2,150,860 compared to $1,332,440 for the first six months of 1995,
representing an increase of $818,420 or 61.4%. As a percentage of revenues,
selling and marketing expense increased to 12.6% in the first six months of
1996 from 11.8% for the same period of 1995. The increase was due primarily to
increased sales commissions resulting from higher sales and increased expenses
of developing international markets.
GENERAL & ADMINISTRATIVE EXPENSE
For the first six months of 1996, general and administrative expense totaled
$1,075,029 compared to $710,772 for the first six months of 1995, representing
an increase of $364,257, or 51.2%. As a percentage of revenues, general and
administrative expense remained constant at 6.3% for the first six months of
1996 and 1995. The increase in this expense is largely attributable to
increased employee bonuses that
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are based on Company performance and to increased costs including professional
fees incurred as a result of being a publicly owned company during the first
six months of 1996, but not during the comparative period of 1995.
RESEARCH, ENGINEERING & DEVELOPMENT EXPENSE
For the first six months of 1996, research, engineering and development expense
totaled $1,591,691 compared to $1,127,724 for the first six months of 1995,
representing an increase of $463,967, or 41.1%. As a percentage of revenues,
research, engineering and development expense decreased to 9.4% from 10% for
the first six months of 1995. The increase was primarily due to increased
personnel expenses such as recruiting and salaries for new employees and to
related expenditures for computers, software and equipment.
OTHER INCOME AND EXPENSE
Other income and expense consists primarily of interest income and interest
expense. For the first six months of 1996, other income was $388,672 compared
to other expense of $17,663 for the first six months of 1995, representing an
increase of $406,335. The increase in other income was primarily attributable
to the investment of the net proceeds of $15.8 million from the Company's
initial public offering in December 1995. (See Liquidity and Capital
Resources.)
PROVISIONS FOR INCOME TAXES
The provision for income taxes for the first six months of 1996 increased 91%
or $760,679 to $1,598,000 from $837,321 for the first six months of 1995. The
increase in the provision for income taxes was primarily due to the increase in
income from operations and investment income. The effective tax rate also
reflects the unavailability of the credit for research and development expenses
during the period. Although this credit was recently reinstated through
legislation, its effect is only prospective.
NET INCOME
For the first six months of 1996, net income was $2,569,666 compared to
$1,488,571 for the first six months of 1995, representing an increase of
$1,081,095 or 72.6%. As percentage of sales, net income for the second quarter
and the first six months of 1996 increased to 15.8% and 15.1%, respectively.
The increase was primarily due to increased revenues, as described above.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $23.0 million at June 30, 1996 compared to
working capital of $4.7 million at June 30, 1995. The improvement in working
capital position was due primarily to the net proceeds of $15.8 million
received from the Company's initial public offering on December 14, 1995. The
Company has used and expects to continue to use the remaining proceeds of the
initial public offering for working capital and new product development
activities. Cash provided by operations was $1.5 million and $1.7 million for
the six months ended June 30, 1996 and 1995, respectively. Income from
operations was the primary source of cash for the six months ended June 30,
1996 offset by increases in accounts receivable and inventories due to
increased sales during the period. Also, during the first six
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months of 1996, operating cash was used to reduce accounts payable as the
Company initiated a program to take advantage of discounts offered by
suppliers. At June 30, 1996, the Company had not borrowed any amounts against
its $2,500,000 available bank line of credit.
Capital expenditures were $992,861 for the first six months of 1996 and were
primarily related to test fixtures and development systems, computer and office
equipment for increased staff, as well as leasehold improvements made to the
Company's facilities. Capital expenditures were $267,193 for the first six
months of 1995, and were primarily related to office equipment, test fixtures
and development systems, tooling and leasehold improvements. The Company
presently has no material capital expenditure commitments. The Company
anticipates capital expenditures to continue to increase in 1996 to support
future growth.
BACKLOG
The Company's backlog consists of firm customer purchase orders for the
Company's various products. As of June 30, 1996 the Company had a backlog of
$5,369,478, an increase of $3,257,298 or 154% from the backlog $2,112,180 at
December 31, 1995 and an increase of $1,309,254 or 32% from the backlog of
$4,060,224 of March 31, 1996.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
On July 23, 1996 the Company's Board of Directors declared a distribution of
one Preferred Stock Purchase Right for each outstanding share of the Company's
common stock. The rights will be exercisable only if a person or group acquires
20% or more of the Company's common stock or announces a tender or exchange
offer for 20% or more of the common stock. In such an event, each right will
entitle shareholders to buy one-hundredth of a share of a new series of
preferred stock at an exercise price of $115.00. Each one-hundredth of a share
of the new preferred stock has terms designed to make it the economic and
voting equivalent of one share of common stock.
If a person or group acquires 20% or more of the Company's outstanding common
stock, each right not owned by the person or group will entitle its holder to
purchase at the right's exercise price a number of shares of the Company's
common stock (or, at the option of the Company, the new preferred stock) having
a market value of twice the exercise price. Further, at any time after a person
or group acquires 20% or more (but less than 50%) of the outstanding common
stock, the Board of Directors may at its option, exchange part or all of the
rights (other than rights held by the acquiring person or group) for shares of
the Company's common or preferred stock for a one-for-one basis.
If after a person or group acquires 20% or more of the outstanding common stock
the Company is acquired in a merger or other business transaction, each right
will entitle its holder to purchase, at the right's exercise price, a number of
the acquiring company's common shares having a market value at that time of
twice the exercise price.
The Board of Directors is entitled to redeem the rights for one cent per right
at any time before a 20% position has been acquired. The Board is also
authorized to reduce the 20% thresholds referred to above to not less than 10%.
The rights are not being distributed in response to any specific effort to
acquire control of the Company, nor is the Company aware of any such effort.
The distribution of the rights will not affect the Company's reported earnings
and is not taxable to shareholders or to the Company. Shareholders will not
receive any documents evidencing their rights unless and until the rights
become exercisable. Until that time, the rights will not trade separately from
the common stock. The rights will expire on August 15, 2006. For a more
complete and detailed description of the terms and conditions of such rights,
refer to the text of the complete Rights Agreement referenced and incorporated
herein by reference at Exhibit 4.1 and included as Exhibit 1 to the Company's
Registration Statement on Form 8-A.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 22, 1996 the Company held its annual stockholders meeting. At that
meeting, R. Craig Allison, Christian L. Allison and Daniel P. Barry were
elected to the Board of Directors for a three year term expiring at the annual
meeting of the shareholders in 1999. Also, the terms of Lawrence A. Arduini,
Thomas M. Dugan, Rocco L. Flaminio and Robert W. Kampmeinert continued after
the meeting. On May 31, 1996 Thomas M. Dugan resigned from the Board for
personal reasons.
The total votes cast and the results of the voting were as follows:
Total Votes Cast For Withheld
---------------- --- --------
R. Craig Allison 4,437,893 4,427,260 10,633
Christian L. Allison 4,437,893 4,426,960 10,933
Daniel P. Barry 4,437,893 4,425,960 11,933
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
The following exhibits are being filed with this report:
Exhibit
Number Description
------- -----------
4.1 Rights Agreement, dated as of July
23, 1996 between the Company and
Chase Mellon Shareholder Services,
L.L.C. filed as Exhibit 1 to the
Company's Registration Statement on
Form 8-A, and incorporated herein by
reference thereto.
10.1 Change in Control Agreement, entered
into May 30, 1996 between the
Company and Sara M. Antol, together
with a schedule listing
substantially identical agreements
with Robert Cornelia, Ruth Dilts,
Herman Flaminio, Rocco Flaminio,
Mark Frey, Joseph Giannetti, Douglas
Halliday, Fred Kiko, Samuel Knoch,
Goeffrey Lea, Gregory Nulty, Matthew
Rosgone and Kristee Williams.
11.1 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K:
The Company did not file any Current Report on Form 8-K during the
quarter ended June 30, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TOLLGRADE COMMUNICATIONS, INC.
(REGISTRANT)
Dated: August 13, 1996 /s/ CHRISTIAN L. ALLISON
----------------------------------
Christian L. Allison
Chief Executive Officer & Director
Dated: August 13, 1996 /s/ DOUGLAS T. HALLIDAY
----------------------------------
Douglas T. Halliday
Treasurer
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EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Exhibit
Number Description
------- -----------
4.1 Rights Agreement, dated as of July 23, 1996
between the Company and Chase Mellon
Shareholder Services, L.L.C. filed as
Exhibit 1 to the Company's Registration
Statement on Form 8-A and incorporated
herein by reference thereto.
10.1 Change in Control Agreement, entered
into May 30, 1996 between the
Company and Sara M. Antol, together
with a schedule listing
substantially identical agreements
with Robert Cornelia, Ruth Dilts,
Herman Flaminio, Rocco Flaminio,
Mark Frey, Joseph Giannetti, Douglas
Halliday, Fred Kiko, Samuel Knoch,
Goeffrey Lea, Gregory Nulty, Matthew
Rosgone and Kristee Williams.
11.1 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
15