<PAGE>   1
                                   FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995
                                       OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934     [NO FEE REQUIRED]

For the transition period from __________ to __________

                          Commission File No.: 0-14685

                              GENICOM CORPORATION
             (Exact name of registrant as specified in its charter)

                DELAWARE                                 51-0271821
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                  Identification No.)
                                                     
     14800 CONFERENCE CENTER DRIVE                   
         SUITE 400, WESTFIELDS,                      
          CHANTILLY, VIRGINIA                            22021-3806
(Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (703) 802-9200

       Securities registered pursuant to Section 12(b) of the Act:  None
          Securities registered pursuant to Section 12(g) of the Act:
                          Common stock, $.01 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 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 is not contained, to the best of the registrant's knowledge,
in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K. 
                       ---

As of February 2, 1996, there were 10,852,999 shares of Common Stock of the
Registrant outstanding.  The aggregate market value of the shares of Common
Stock held by non-affiliates (without admitting that any person whose shares are
not included in determining such value is an affiliate) was approximately
$49,770,130 based upon the closing price of the shares in the NASDAQ
over-the-counter market on February 2, 1996.


                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive proxy statement with respect to the
Annual Meeting of Stockholders to be held on May 1, 1996:  Part III
<PAGE>   2
                      GENICOM CORPORATION AND SUBSIDIARIES
                                FORM 10-K INDEX



<TABLE>
<S>                                                                                                        <C>

                                                               PART I

Item 1.          Business                                                                                     3
Item 2.          Properties                                                                                  13
Item 3.          Legal Proceedings                                                                           13
Item 4.          Submission of Matters to a Vote of Security Holders                                         14

Executive Officers of the Registrant.                                                                        14

                                                               PART II


Item 5.          Market for the Registrant's Common Stock and Related Stockholder Matters                    15
Item 6.          Selected Financial Data                                                                     16
Item 7.          Management's Discussion and Analysis of Financial Condition
                   and Results of Operations                                                                 17
Item 8.          Financial Statements and Supplementary Data                                                 22
Item 9.          Changes in and Disagreements with Accountants on Accounting
                   and Financial Disclosure                                                                  43


                                                               PART III


Item 10.         Directors and Executive Officers of the Registrant                                          44
Item 11.         Executive Compensation                                                                      44
Item 12.         Security Ownership of Certain Beneficial Owners and Management                              44
Item 13.         Certain Relationships and Related Transactions                                              44


                                                               PART IV

Item 14.         Exhibits, Financial Statement Schedules and Reports on Form 8-K                             45
Signatures                                                                                                   48
Index to Financial Statements and Schedules                                                                 F-1
Index to Exhibits                                                                                           E-1
</TABLE>


                                       2
<PAGE>   3
ITEM 1. BUSINESS

GENERAL

GENICOM Corporation ("GENICOM" or the "Company"), through its worldwide
operations, provides  maintenance and repair services for computer systems
produced by multiple vendors, network planning, integration and optimization
services and develops and distributes printers and related products.  Through
its acquisition of substantially all of the assets and certain liabilities of
Harris Adacom Network Services, Inc., the Company is developing into a fully
integrated provider of multivendor business services.  GENICOM's service
businesses include (i) multivendor support (i.e. hardware installation and
repair and maintenance contracts) and (ii) network management services (i.e.
software and network consulting services, system specification and evaluation,
hardware and software design and integration, documentation and contract
labor).  GENICOM continues to design and provide distribution of impact and
page printers for (i) use in cost sensitive environments; (ii) the printing of
multi-part forms and bar-codes; and (iii) providing printing connectivity in
proprietary systems.  The Company also provides spare parts and supplies, such
as, print heads, printed wire boards, ribbons and printer cartridges for both
the Company's as well other manufacturers' printers.

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

The Company's businesses are reported in two business segments: Enterprising
Service Solutions and Document Solutions.  Financial information by business
segment and geographic location appears on pages 40 and 41 of this Annual
Report on Form 10-K.  This information includes sales and service revenues,
operating income and identifiable assets for the year ended December 31, 1995.

Operation of the Company's subsidiaries in Australia, Canada, and Europe is
subject to various risks associated with political and economic developments in
such countries, such as tariffs imposed to discourage imports, varying product
standards and specifications, and value added and excise taxes.  In addition,
GENICOM is exposed to currency fluctuation risks as a result of its
international sales and sourcing of products from foreign vendors. Accordingly,
sales or cost of components may decrease or increase as the value of the United
States dollar appreciates or depreciates relative to the currency of the source
country.  The Company usually hedges these currency risks through the purchase
of forward exchange contracts and expects to continue this practice in the
future.

In December 1994, the Mexican peso suffered a devaluation of approximately 30%.
The impact on the Company's financial position, results of operations and
liquidity was immaterial.

ENTERPRISING SERVICE SOLUTIONS

                                    GENERAL

GENICOM performs a wide range of service solutions related activities through
its Enterprising Service Solutions company.  These operations, which are
classified into the Company's Multivendor Services and Integrated Network
Services operations, include the provision of services for customers of both
other vendors' products and GENICOM products - Multivendor Services - and for
customers in need of network consultation - Integrated Network Services.
Multivendor Services accounted for 80.8 percent of Enterprising Service
Solutions revenue while Integrated Network Services provided the remaining 19.2
percent in 1995.





                                       3
<PAGE>   4
                              MULTIVENDOR SERVICES

Through its Multivendor Services operations, the Company performs a variety of
service related activities for customers utilizing not only GENICOM products
but also products manufactured by other vendors.  Products serviced by
Multivendor Services include servers and midrange systems, personal computers,
workstations, networking products, controllers, routers, hubs, terminals,
printers, peripherals, and storage devices.  Services are typically provided on
a subcontracted basis for major hardware vendors such as IBM and Canon, or
directly under contract with system users, such as NASDAQ or USX.  Service
contracts, which comprise the major portion of Multivendor Services revenue,
typically extend for several years, with payment due monthly, quarterly or
annually, in advance.  Service is generally available Monday through Friday,
during normal working hours, with response times ranging from 4 to 8 working
hours in metro areas and less than 16 working hours outside metro areas.
Standard depot repair time is five working days.  The Company's service
activities include the following:

<TABLE>
   <S>                            <C> 
   Preventive maintenance         Regularly scheduled visits to customer sites and to provide routine 
                                  maintenance.
                                  
   Depot repair                   Unit repair or refurbishment in GENICOM's quality controlled repair 
                                  facility by qualified depot technicians.

   Onsite support                 Repair of down equipment accomplished at customer site by qualified 
                                  field engineers.

   Technical support              Phone service for customers and field engineers providing technical 
                                  and operating information for products and software.

   Installation                   Installation of hardware and software products at customer's site.

   Training                       Hands on training for customers, field engineers, and partners at our 
                                  training facility or at customer's site.

   Documentation                  Training and service manuals and videos for a broad portfolio of 
                                  hardware products.

   Systems integration            Customer tailored solutions providing hardware, software and 
                                  services to meet unique customer information technology needs.
</TABLE>

Multivendor Services seeks to become a leading provider of information-related
services in those markets in which it competes.  Thus, it strives to maintain a
strong focus on existing customers, while simultaneously developing growth
opportunities that become available.  To that end, the Company significantly
expanded its presence in the multivendor services market by acquiring
substantially all of the assets and certain liabilities of Harris Adacom
Network Services, Inc. ("HANS"), including all of the stock of HANS' Canadian
subsidiary, Harris Adacom Inc., on March 1, 1995.  Through this acquisition,
the Company added HANS' computer and peripherals field and depot repair service
operations to the Multivendor Services operation, significantly expanding the
Company's core competencies and improving its efficiency in these markets.

Multivendor Services operations now provide a "one stop" maintenance service
approach that includes  hardware maintenance and repair, quality assurance,
configuration management, and asset management.  Given the wide variety of
computer equipment brands used by individual customers, Multivendor Services
focuses on third party maintenance of hardware and peripheral equipment,





                                       4
<PAGE>   5
employing some of the most knowledgeable technicians in the industry who are
able to service a wide breadth of equipment.

As of March 1996, the Company services over 14,000 customers and 281,000
devices through its domestic Multivendor Services operations.  Such operations
are classified into depot and field repair services.

Depot Repair

Depot repair services are employed when, due either to complexity of repair or
cost related issues, the repair of a customer's defective hardware cannot be
completed in the field.  The Company has established two facilities to conduct
domestic depot repair operations, one in Waynesboro, Virginia, where printers,
keyboards, personal computers, controllers and other network-related hardware
are serviced, and another in Bedford, Massachusetts, where workstations,
systems and monitors are serviced.  The Waynesboro facility performs less
complex high volume services on both GENICOM and multivendor products, whereas
the Bedford facility primarily services multivendor products which employ
complex technologies.  In 1994 and 1995,  the Bedford facilities and in 1995,
the Waynesboro facilities were certified for compliance with the provisions of
ISO 9002 International Quality System Standard, in recognition of the Depot
Repair operations consistent quality of service.

Field Repair

Field repair services are traditionally employed to repair equipment which
utilizes less complex technologies where it is more efficient to repair the
product in the field rather than to ship it to one of the Company's depot
repair facilities.  The Company segregates domestic field repair operations by
geographic location, and within each service center by field engineer skill
type.  The Company deploys over 340 field engineers and 164 service vans from
140 service centers in all 50 states, including all major metro areas.

Field repair and maintenance operations are, like depot repair work, typically
performed under contract with hardware vendors such as Computervision or Canon
or provided directly to the hardware user.  Field clients and company engineers
are categorized through an internal grading system which allows the Company to
more efficiently assign Company repair engineers based on their levels of
expertise and cost, after GENICOM customer service representatives assess the
technical skill level required to adequately serve the customer. Through such
orderly scheduling of its field technicians, the Company attempts to minimize
its cost structure.

GENICOM provides its Canadian and European customers parts and services through
the Company's international subsidiaries.  GENICOM services its Latin American,
Middle Eastern, African and Pacific Rim customers through authorized
distributors of GENICOM products.

Sales, Marketing and Competition

Multivendor Services has increased its sales and marketing efforts.  Through
alliances with key OEM customers and the HANS acquisition, Multivendor Services
has been able to expand its offerings to meet a broader range of customer
needs.

Multivendor Services competes with, among others, independent providers of
repair services, in-house repair centers of OEMs and third party maintenance
organizations (TPMs).  Multivendor Services believes that it offers
cost-effective maintenance and repair solutions to OEMs and TPMs and,
therefore, considers these entities potential customers.





                                       5
<PAGE>   6
The Company believes that Multivendor Services competes primarily on the basis
of price and the scope and quality of its services.  Due in part to the capital
costs necessary to maintain adequate inventory and equipment to service large
OEMs and TPMs, Multivendor Services believes the capital constraints of small
maintenance and repair companies preclude them from competing with Multivendor
Services for large programs.  Multivendor Services also believes that the scope
of its maintenance and repair operations and capabilities provides it with
competitive advantages over many of its competitors.

                          INTEGRATED NETWORK SERVICES

Centralized network systems management and control solutions have evolved to
meet the needs of network managers responsible for the expanding corporate
distributed computing environments. Many companies now outsource their network
service activities to companies such as GENICOM which can provide total network
planning, integration and optimization services across a variety of software
and hardware platforms. Through the acquisition of HANS, the Company acquired
knowledgeable marketing personnel, a proven sales force, highly regarded
technicians and an established customer base, which have allowed the Company to
establish the Integrated Network Services operation and to expand its services
into the high growth market of network integration and management.

Integrated Network Services provides turnkey network solutions for clients
through system software and hardware planning, system installation, integration
and training, as well as post-implementation facilities management and
technical services.  Integrated Network Services personnel essentially tailor
logical or physical network infrastructures to meet customers' information
gathering, processing and reporting system needs by recommending, selecting,
benchmarking and sometimes installing the requisite hardware, software and
computer services.  Integrated Network Services often performs client need
assessments, then designs, selects and installs systems structured to meet
client needs, and then trains client personnel with respect to the use of such
systems.  Typically, the Company contracts its Integrated Network Services
computer technicians and systems engineers to clients on a per diem basis.

Integrated Network Services also provides diagnostic and monitoring services
for the evaluation of existing computer networks.  Such services are primarily
provided on a contract labor basis or annual fees to support customers'
existing information technology systems, including concept formulation, system
specification, system engineering design/development and project management.
Such services are important for managing the growth of and optimizing usage
from existing networks.  Typically, Integrated Network Services establishes and
reports on an existing system's capabilities, including usage, software and
hardware inventory and network functionality, and then provides remote network
monitoring services to continue to evaluate the network's capacity and usage,
allowing clients to regularly track the value provided by the network.

The establishment of Integrated Network Services provides the Enterprising
Service Solutions company the opportunity to leverage its existing technical
capabilities and established customer base with additional value-added business
services.  The Company generally can offer systems to customers to meet
configuration and capacity needs identified through the rendering of diagnostic
and monitoring services.  Further, on-going network monitoring activities
frequently identify network component breakdowns which may be referred to
Multivendor Services for repair.  Thus, the establishment of Integrated Network
Services and in particular the integration of HANS' systems integration and
network diagnostic and monitoring operations has provided the Company new
opportunities to provide its customers a total application solution through the
Enterprising Service Solutions company.





                                       6
<PAGE>   7
DOCUMENT SOLUTIONS

                         PRINTERS AND RELATED PRODUCTS

The Company offers a wide range of serial (one character at a time), line (one
or more lines at a time) and page (one page at a time) printers, with
performance features and prices suitable for a varied range of printing
applications.  Besides offering a wide range of technologies and print speeds,
GENICOM's printers offer multiple combinations of features that make them
suitable for diverse applications.  Such features include multiple copy and
extensive paper handling capabilities, multiple type styles (fonts) and bar
codes.  GENICOM's printers are used with desktop workstations and with various
networks and stand alone configurations in conjunction with micro, mini,
super-mini and mainframe computers.

Document Solutions also sells spare parts and supplies, for both GENICOM
products and those manufactured by other vendors.  Supplies include items that
have a relatively short life such as printer ribbons and cartridges, while
spare parts include items that have generally a longer life such as print heads
and printed wire boards.

The following table reports the composition of Document Solutions revenue:

<TABLE>
<CAPTION>
                                               1995             1994            1993
                                            --------         --------        --------
 <S>                                           <C>              <C>             <C>
 Impact Printers                                44.9  %          46.2 %          53.9 %
 Nonimpact Printers                             11.1              9.3             9.7
 Spares                                         11.3             11.7             9.7
 Supplies                                       32.7             32.6            26.7
 TOTAL DOCUMENT SOLUTIONS                   --------         --------        --------
                                               100.0  %         100.0 %         100.0 %
                                            ========         ========        ========
</TABLE>                                    

The following table sets forth a summary of certain performance features of
GENICOM's principal printer products.  Manufacturer's List Price Range is as of
January 1996.  Sales price may vary depending on features installed,
customization, discounts and other factors.

<TABLE>
<CAPTION>
                                                                                                            Manufacturer's
                                                                                                              Suggested
    Printer      Technology          Draft                                                                   List Price
 Product Family     Type          Print Speed              Features                      Options                Range
 ---------------------------------------------------------------------------------------------------------------------------
 <S>               <C>             <C>                <C>                            <C>                    <C>
 IMPACT-SERIES
 2000 Series       9 wire serial   60 to 150 cps      teleprinters for desktop       paper handling         $2,906 - $3,008
                   matrix                             applications                   options, current
                                                                                     interface and
                                                                                     pedestal
 2400  Series      9 wire serial   270 to 320 cps     designed for attachment to                            $1,492-$1,658
                   matrix                             IBM 3270 controllers (coax
                                                      and IBM AS/400 twinax) with
                                                      versatile paper handling
 3000 Series       9 or 18 wire    240 to 400 cps     wide range of models for       additional fonts,      $2,079 - $3,130
                   parallel or                        different environments,        graphic buffer
                   staggered                          color and bar codes            expansion, paper
                   serial matrix                                                     handling options

 3400 Series (1)   9 or 24 wire    400 to 480 cps     mid-range network printer,     paper handling         $1,329-$1,645
                   serial matrix                      advanced paper handling to     options, colorkit and
                                                      include dual tranctors and     pedestal
                                                      auto sheet feeder, postnet
                                                      and bar codes, with automatic
                                                      switching serial (parallel
                                                      interface)

 3800 Series       18 wire         600 cps            high-speed, network printer,   additional fonts,      $2,125 - $2,499
                   parallel                           advanced paper handling and    oversize characters
                   serial matrix                      single/dual path, postnet and  and DEC LA210,
                                                      bar codes                      pedestal and paper
                                                                                     handling options
</TABLE>





                                       7
<PAGE>   8
<TABLE>
 <S>               <C>             <C>                <C>                            <C>                    <C>
 3900 Series       18 wire         600 cps            designed for attachment to     additional fonts,      $2,999 - $4,520
                   parallel                           IBM 3270 controllers (coax)    pedestal and paper
                   serial matrix                      and IBM Systems 3X or AS/400   handling options
                                                      (twinax), high-speed,
                                                      advanced paper handling and
                                                      bar codes

 IMPACT-LINE
 4000 Series       shuttle matrix  400 to 1400 lpm    heavy-duty cycle, maintenance  additional fonts and   $6,195 - $10,158
                   line printer                       free features, advanced paper  paper motion detector
                                                      handling, graphics and bar     QMS bar codes
                                                      codes

                   band line       800 to 1200 lpm    fully-formed letter quality    special character      $8,685 - $11,990
                   printers                           print, rugged band printer     bands
                                                      features and postnet

 4500 Series       shuttle matrix  1200 to 1400 lpm   designed for attachment to     additional fonts       $7,790 - $11,158
                   line printer                       IBM 3270 controllers (coax),   QMS bar codes
                                                      IBM Systems 3X or AS/400
                                                      (twinax) and bar codes
 4800 Series       shuttle matrix  400 to 800 lpm     reliable, low cost of          QMS & IPG graphics     $5,995 - $8,013
                   line printer                       ownership, printer designed    IBM twinax and coax
                                                      for connectivity to Ethernet,
                                                      TCP/IP, Token Ring, AT&T SSI
                                                      and LANS

 4900 Series       shuttle matrix  400 to 800 lpm     designed for attachment to     additional fonts       $7,047 - $9,265
                   line printer                       IBM 3270 controllers (coax),   QMS/IGP bar codes
                                                      IBM Systems 3X or AS/400
                                                      (twinax) and bar codes
 NONIMPACT
 7000 Series       page printers   10 to 17 ppm and   desktop, network and           interconnection with   $995 - $3,979
                   (laser) and     color thermal      multiuser environments, high   Geniscript,
                   thermal         transfer printer   resolution, multiple resident  (Postscript language
                   transfer        at 2.5 min per     fonts, PCL5 & PCL5E            compatible
                   printer         page               compatibles, supports various  interpreter),
                                                      paper sizes  including large   multipurpose feeder,
                                                      format printing up to 11" x    versatile
                                                      17"                            input/output paper
                                                                                     handling devices and
                                                                                     duplexing

 7900 Series (1)    page printers  10 to 16 ppm       Multiuser, IBM client server   MarkNet internal       $1,399 - $5,665
                   (laser)                            environments, full IBM 4028    network adapter
                                                      IPDS emulation, PCL5E &        connects up to 18
                                                      Postscript Level 2 compatible  different operating
                                                      up to 1200 dpi, bar codes,     systems, versatile
                                                      labels, graphics, electronic   input/output paper
                                                      forms                          handling devices and
                                                                                     duplexing, various
                                                                                     memory options

 7930/40 Series    page printers   30 to 40 ppm       multi-user materials, IBM      Internal network       $18,316-$32,333
 (1)               (LED array)                        client server environments,    connectivity options
                                                      full IBM 4028 IPDS emulation,  & printer cabinet
                                                      PCL5E and Postscript Level 2
                                                      comparability , hard drive
                                                      for software upgradability
                                                      and storage of forms and
                                                      fonts
 9000 Series       page printers   8 to 17 ppm        desktop, network and           interconnection with   $4,195 - $4,395
                   (laser)                            multiuser environments, high   Geniscript,
                                                      resolution, multiple resident  (Postscript language
                                                      fonts, PCL5 compatibles,       compatible
                                                      supports various paper sizes   interpreter),
                                                      including large  format        multipurpose feeder,
                                                      printing up to 11" x 17"       versatile
                                                                                     input/output paper
                                                                                     handling devices and
                                                                                     duplexing
</TABLE>


The following are trademarks or registered trademarks of their respective
companies: DEC of Digital Equipment Corporation; Geniscript of GENICOM
Corporation; IBM and IBM Proprinter of International Business Machines
Corporation; PCL5 & PCL5E of Hewlett-Packard Company, Postscript of Adobe
Systems, Inc.

Definitions: cps-characters per second, lpm-lines per minute, ppm-pages per
minute

(1) Volume shipments for these products began in 1995.





                                       8
<PAGE>   9
                                 RELAY PRODUCTS

The Company offers a line of relays that are used principally in signal
switching applications requiring high functional reliability and product
quality and are sold primarily for aerospace and defense applications,
automatic test equipment applications and, to a lesser extent, communication,
industrial control and transportation control applications.  GENICOM believes
that its certified and proprietary designs should enable it to continue to
participate in future major space and weapons programs.  Relay revenues have
declined since 1990 due to decreased spending by defense contractors.  There
are relatively few competitors in the relay market that GENICOM serves.  Relay
revenues, as a percentage of total revenues, were 4.0%, 6.4% and 6.8% in 1995,
1994 and 1993, respectively.


Manufacturing

Document Solutions products are manufactured and assembled primarily at
facilities in Reynosa, Mexico and McAllen, Texas and to a lesser extent at the
Company's facility in Waynesboro, Virginia.  Certain GENICOM designed products
are produced by a third party manufacturer located in the Republic of India.
The Reynosa facility assembles certain impact printer product lines and
produces printed circuit boards, high-speed matrix printheads, ribbon
cartridges and a variety of conventional electromechanical assemblies.  The
Waynesboro facility is used primarily for depot repair and relay manufacturing.

In December of 1995, the Company entered into a five year agreement (renewable
annually after 5 years) with Atlantic Design Company, a subsidiary of Ogden
Services Corporation, ("ADC") pursuant to which ADC acquired the Company's
manufacturing operations in McAllen, Texas and Reynosa, Mexico.  Under the
agreement, ADC is committed to manufacturing substantially all of the Company's
impact printer products, printed circuit boards, related supplies and spare
parts, while the Company retains design, intellectual and distribution rights
with respect thereto.  Pursuant to the agreement, the Company will be a
preferred provider of impact and page printers and multivendor information
technologies service to Ogden Services Corporation. The agreement also requires
the Company to purchase from ADC, $54.0 million of product by April 1997 or to
pay to ADC lost profits for the Company's failure to do so.


Sales and Marketing

The major portion of printer and relay sales are made pursuant to purchase
agreements, blanket purchase orders and similar arrangements whereby products
are deliverable only after the customer issues a purchase order, release or
schedule covering specific numbers of units and specifying firm delivery dates.
Such arrangements usually contain price protection provisions which provide
that if the Company decreases its prices, customers will receive the benefit of
such price decreases for products then held in inventory.  The Company's
agreements with larger OEMs for printer sales generally require the customer to
provide GENICOM with continuously updated forecasts of its requirements and to
issue firm orders for deliveries for up to a twelve month period.

GENICOM markets its products and services through several domestic and
international channels. GENICOM's distribution channels consist of (1) national
and regional distributors who sell to value added resellers ("VARs"), dealers
and end users, and (2) a direct sales force which sells to OEMs, end users and
value added resellers and dealers.





                                       9
<PAGE>   10
Most printers are available in several standard models, enabling Document
Solutions to serve a wide range of customer requirements.  A combination of
accessories satisfies various printing applications.  In addition, standard
models are customized for OEMs and end users using GENICOM's engineering design
capabilities.  No customer accounted for more than 10% of GENICOM's total sales
in 1995.

GENICOM maintains international sales and marketing subsidiaries in Australia,
Canada, France, Germany, Italy and the United Kingdom.  These subsidiaries
offer GENICOM products and services to distributors, small OEMs, system houses,
VARs and retail dealers in over 66 countries in primarily local currencies.
See "Business Segment and Geographic Information."

Competition

Document Solutions' printer products compete in markets characterized by rapid
technological change and strong competition.  The Company competes primarily in
the medium and high-performance segments of the printer market where users
require reliable printers principally for word processing, shared network
printing, graphics, bar codes and other business applications.  The Company
competes against many well-established companies, some with financial,
technical and operating resources greater than GENICOM.  Such competitors
include large computer system manufacturers that produce printers for their own
product lines and, in certain cases, for sale to other suppliers or end  users.
In addition, there are a number of independent printer manufacturers producing
printers that compete with those offered by GENICOM.

Competitive factors within the printer market include price, performance,
reliability, cost of ownership, versatility, ease of maintenance, applications
solutions support, after-sales service and support and marketing channels.  As
the computer industry continues to move toward product standardization and
relies less on proprietary designs, GENICOM will be challenged to continue to
differentiate its products based on these competitive factors.  The Company
believes that its ability to maintain a competitive market position depends on
the following: development of applications solutions to customer needs,
continued growth of nonimpact printer technologies, sustained migration to
shared printing environments, effective channels to market, continued
enhancement of the Company's product line and improvements in the Company's
productivity.  To enhance its competitive position in the nonimpact market, the
Company purchased Printer Systems Corporation ("PSC") on February 16, 1995.
PSC provides Document Solutions with proprietary software and hardware
technology for distributed communications, data stream management and imaging
with emphasis on complex raster image command languages for page printers and
IBM network transmission protocols.  Raster imaging is a widely employed
technology used in translation and creation of images for nonimpact printing
and other applications.  Utilizing PSC expertise, the Company has introduced a
new series of desktop laser printer products for small workgroups or
departmental printing.  The Company has broadened its page printer product line
and increased its penetration in the IBM compatible market and built on its
value added application solution strategy with the PSC acquisition.

The Company believes that the market for impact printers has largely shifted to
shared-resource, application-specific environments such as bar coding and
multipart forms.  As this happens, the Company is narrowing its focus to these
niche markets, de-emphasizing or discontinuing low-end offerings and channeling
resources to markets where growth potential is greatest.  As the market for
this technology has declined, the Company is also focusing on the replacement
market.  By addressing connectivity issues and applications such as industrial
graphics and labels, the Company has designed products which appeal to the
existing user base as well as new customers.  Impact printers continue to meet
customer application needs not yet satisfied by nonimpact technologies, in such
areas as multipart forms, high-volume reliability and low cost ownership.





                                       10
<PAGE>   11
                                    GENERAL

ENVIRONMENTAL MATTERS

As a result of manufacturing processes, the Company generated and managed
hazardous wastes at its facilities.  The Company does not believe that
compliance with Federal, State and local regulations will have a material
effect on its capital expenditures, financial condition or results of
operations.  See "Legal Proceedings."

BACKLOG

The Company's order backlog at December 31, 1995 was approximately $47.5
million, compared with approximately $48.9 million at January 1, 1995.
GENICOM's reportable backlog includes all orders associated with relays,
service, systems integration, network monitoring and those orders for printers,
spare parts and supplies for which a delivery date within approximately six
months has been specified by the customer.  The Company expects to ship
substantially all printer, spares and supplies orders in reported backlog
within fiscal year 1996.  The Company normally experiences lower sales each
year in its third quarter due to European holidays.

GENICOM's working capital practices are consistent with the working capital
practices of the printer industry.  GENICOM's customer payment terms generally
require invoices to be paid within thirty days of the date of issue.

ENGINEERING, RESEARCH AND PRODUCT DEVELOPMENT

GENICOM incurs engineering, research and product development costs for the
following purposes: development of new products; applications solutions
development; modification, enhancement and achievement of cost reductions for
existing product lines; customization of products for OEMs; market research;
and development of process inspection criteria to ensure new products are built
to specification.  GENICOM's expenditures for engineering, research and product
development were $8.4 million, $7.7 million and $9.8 million in 1995, 1994 and
1993, respectively.  $0.5 million of the 1993 amount related to restructuring
costs.  In 1995, 1994 and 1993 the Company expended 5.0%, 4.6% and 5.6% of
products revenue, respectively, in engineering research and product
development.

GENICOM maintains in-house capabilities and facilities available to support its
engineering and design activities.  The Company also engages a number of highly
specialized independent firms to supplement its own engineering capabilities
and to design certain software and components for its products.

PROPRIETARY RIGHTS

GENICOM relies on patent, copyright and trade secret laws to protect its
proprietary and technology rights.  GENICOM obtained certain patents, licenses
and cross-licenses when it acquired the Data Communication Products Business
Department from General Electric Company (collectively "G.E.") in 1983, when it
acquired the Printer related assets of Ekco Group, Inc. (formerly Centronics
Data Computer Corporation, "Centronics") in 1987, and when it acquired Harris
Adacom Network Services, Inc. and Printer Systems Corporation in 1995.
GENICOM continues to patent certain developments, holds certain patents pending
and retains numerous patents expiring at various times between 1995 and 2011.
In addition, the Company has a cross-licensing agreement with IBM that expires
17 years after the date of issue of certain patents pending prior to January 1,
1991.





                                       11
<PAGE>   12
"GENICOM" and certain other marks used in connection with the sale of the
Company's products are registered trademarks of GENICOM in the United States
and, in some cases, certain foreign countries.  Under United States law, a
registered trademark remains valid for 10 years if affirmed at the end of the
sixth year.  There is no limit to the number of times the registration may be
renewed for additional 10-year periods.  Thereafter, each registration may be
renewed for additional 10 year periods; otherwise the registration will expire
automatically.

GENICOM's Laser Printing Solutions strategic business unit specializes in
raster imaging technology and has numerous related patents and trademarks which
should assist in GENICOM's continued penetration into the nonimpact market in
1996.

In connection with the acquisition of the printer-related assets of Centronics,
GENICOM acquired a license to use the name "Centronics" as a trademark,
tradename and service name.

HP Laserjet is a registered trademark of Hewlett-Packard Company.

SUPPLIERS

GENICOM currently purchases raw materials, components and printers from various
domestic and foreign suppliers.  GENICOM utilizes supply agreements and other
arrangements whereby volume discounts can be obtained.

GENICOM purchases certain products - printers, options, supplies and component
parts, including print engines, from sole suppliers who have developed
proprietary processes that the Company incorporates into its products.  In the
event that those suppliers were unable or unwilling to supply these products,
the Company believes it could establish alternate sources for these products or
similar products.  The time required to establish an alternate source could
disrupt the manufacture or distribution of these products, thus causing delays
that could adversely affect revenues.  Currently, the Company considers its
relationships with these vendors to be good and does not anticipate any
disruption in the supply of these products.

In 1995, GENICOM procured 16% of its total purchases from TEC Corporation
("TEC") which supplies the Company with certain nonimpact printer products. No
other supplier accounted for a significant portion of GENICOM's total 1995
purchases.  In 1994, Toshiba Corporation accounted for 13% of GENICOM's total
purchases related to printers.  In December 1995, the Company entered into an
agreement for the term of five years with Atlantic Design Company ("ADC") in
which ADC would take over the Company's manufacturing operations and employees
in McAllen, Texas and Reynosa, Mexico.  ADC is committed to manufacturing all
of the Company's impact printer products, printed circuit boards, related
supplies and spare parts (See "Management's Discussion and Analysis").

EMPLOYEES

As of December 31, 1995, the Company and its subsidiaries employed 1,638
employees.  The Company believes its relations with its employees are
satisfactory.

The Company's production and maintenance employees at its Waynesboro facility
are represented by the United Electrical, Radio and Machine Workers of America
Local 124, under a collective bargaining agreement which expires in July 1996.





                                       12
<PAGE>   13
ITEM 2. PROPERTIES

The following table sets forth certain information with respect to the
Company's owned or leased property as of December 31, 1995:


<TABLE>
<CAPTION>
                                                                                            SQUARE      OWNED OR     YEAR LEASE
      LOCATION                                PRINCIPAL USES                                 FEET        LEASED       EXPIRES
      -------------------                     -------------------------------              --------      -------     ----------
      <S>                                     <C>                                           <C>          <C>            <C>
      Chantilly, Virginia                     Corporate Headquarters                         23,000      Leased         1998
      Waynesboro, Virginia                    Service, Manufacturing, Office                377,000      Owned           --
      Reynosa, Mexico (1)                     Manufacturing                                 120,000      Owned           --
      McAllen, Texas (1)                      Distribution                                   37,500      Leased         1997
      Bedford, Mass.                          Service                                        75,000      Leased         1996
      New Carrollton, Texas                   Service                                       105,000      Leased         2002
</TABLE>

(1) These facilities are currently being subleased by Atlantic Design Company
as part of the manufacturing agreement mentioned above.

GENICOM's leased property is occupied under standard industrial leases.  Each
lease generally contains an optional renewal provision.

The Company's Waynesboro property is subject to a lien in favor of the
Company's lenders under its  loan agreement.

ITEM 3.  LEGAL PROCEEDINGS

The Company and the former owner of its Waynesboro, Virginia facility, General
Electric Company ("G.E."), have generated and managed hazardous wastes at the
facility for many years as a result of their use of certain materials in
manufacturing processes.  The Company and the United States Environmental
Protection Agency ("EPA") have agreed to a corrective action consent order (the
"Order"), which became effective on September 14, 1990.  The Order requires the
Company to undertake an investigation of solid waste management units at its
Waynesboro, Virginia facility and to conduct a study of any necessary
corrective measures that may be required.  Although the Order is currently
being implemented, it is not possible for the Company to reliably estimate the
total cost of the investigation and the study required by the Order.  If, as a
result of the investigation and study, corrective measures are required, the
Company expects that it will then enter into discussions with the EPA
concerning a further order for that purpose.

The Company has been notified by the EPA that it is one of 700 potentially
responsible parties ("PRPs") under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, for necessary corrective action at a
hazardous waste disposal site in Greer, South Carolina.  In prior years, the
Company arranged for the transportation of wastes to the site for treatment or
disposal.  During 1995, the PRPs entered into an administrative consent order
with EPA under which they will undertake a remedial investigation and
feasibility study.

With respect to the above mentioned actions, the Company believes its share of
the costs of the investigation and any corrective action that may be required
are not likely to have a material effect upon the financial condition, results
of operations or liquidity of the Company.

The Company has been named as a defendant in an Original Petition and Petition
for Injunctive Relief filed in August 1995 which alleges that the Company and
certain other defendants are strictly liable for damages allegedly suffered by
the plaintiffs as a result of contamination of groundwater at the
Linn-Faysville Aquifer, in Texas, due to the disposal of dangerous products and
materials at a landfill which is alleged to be the source of the contamination.





                                       13
<PAGE>   14
The Company is currently unable to make any estimates as to whether this action
will have a material effect upon the financial condition, results of operations
or liquidity of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information with respect to the
Company's executive officers as of December 31, 1995:

<TABLE>
<CAPTION>
 NAME                              AGE   TITLE
------------                      ----   -----------------------------------------------
<S>                               <C>    <C>
 Paul T. Winn                      51     Director, President and Chief Executive Officer
 James C. Gale                     53     Senior Vice President Finance and Chief Financial Officer
 Raymond D. Stapleton              56     Senior Vice President, International Subsidiaries
 James A. Jones                    38     Vice President, Corporate Controller and Treasurer
 C. Bruce Meyer                    46     Vice President Human Resources and Corporate Communications
 B. Garrett Buttner                47     Vice President and General Manager, Annuities
 Harold L. McIlroy                 57     Vice President, Quality, Customer Service and Partnerships
 Arthur D. Gallo                   53     Corporate Vice President and General Manager, Document 
                                          Solutions Company
 Michael J. Shelor                 47     Corporate Vice President and General Manager, 
                                          Enterprising Service Solutions Company
</TABLE>

Mr. Winn joined the Company in April 1990 as President and Chief Executive
Officer and became a director in May 1990.  Previously, Mr. Winn was employed
by IBM Corporation, where he served for 22 years in various capacities, most
recently as Vice President of Graphics Systems in the Advanced Work Station
Division.  Prior to that position, Mr. Winn served as Vice President of
Worldwide System Printers, responsible for technology, software, product
development and manufacturing.

Mr. Gale joined the Company as Senior Vice President Finance and Chief
Financial Officer in August 1991.  Previously, Mr. Gale was employed by General
Foods Corporation, where he served for 25 years in various capacities, most
recently as Vice President of Finance for General Foods Corporation and in that
role acted as Chief Financial Officer of General Foods, USA.

Mr. Stapleton became Senior Vice President International Subsidiaries in August
1994 after serving the Company and its predecessor, G.E., in various capacities
for 30 years, most recently as Senior Vice President and General Manager
Enterprising Service Solutions Division.

Mr. Jones served the Company as Corporate Controller since November 1988, and
Treasurer since March 1990 until his resignation in January 1996.

Mr. Meyer was appointed Vice President of Human Resources in September 1991
after serving the Company, and its predecessor, G.E., in various human
resources capacities since 1973.

Mr. Buttner was appointed Vice President and General Manager, Annuities in
November 1995 after having served as Vice President and General Manager
Supplies Business Unit since April 1993.  Prior to his appointment as a
corporate officer, Mr. Buttner had served in sales, marketing and





                                       14
<PAGE>   15
business management positions with GENICOM since 1988.  Previously, Mr. Buttner
was employed by G.E. for 15 years.

Mr. McIlroy was appointed Vice President in July 1995 after joining the Company
October 1991 and serving in various operations management capacities.
Previously Mr. McIlroy was employed by IBM for 30 years.

Mr. Arthur D. Gallo was appointed Corporate Vice President and General Manager,
Document Solutions Company in November 1995 after having been the President of
Printer Systems Corporations since 1985.

Mr. Shelor was appointed Corporate Vice President and General Manager,
Enterprising Service Solutions Company in November 1995 after serving the
Company and its predecessor, G.E., in various operating positions since 1969.

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

Stock Trading:

GENICOM's common stock is quoted and traded on the Nasdaq National Market
System (Symbol: GECM). As of February 2, 1996, there were approximately 610
shareholders of record.  The following table sets forth, for the periods
indicated, the high and low closing prices per share of GENICOM common stock as
reported by Nasdaq:

<TABLE>
<CAPTION>
                                         1995                             1994
                            ---------------------------     ------------------------------
                                  HIGH            LOW              High            Low
<S>                         <C>            <C>               <C>            <C>
First Quarter               $     2 7/8    $       2         $     1 5/8    $    1 1/16
Second Quarter                    4 3/4          2 1/8             2 3/8            1
Third Quarter                     5 7/8          4 1/8             3 1/4          1 3/4
Fourth Quarter                    5 3/8            4               2 7/8          1 7/8
</TABLE>



Additionally, GENICOM has not paid a cash dividend on its common stock.  The
Company intends to retain earnings from operations for use in its business, and
therefore does not anticipate paying any cash dividends in the foreseeable
future.





                                       15
<PAGE>   16
ITEM 6.  SELECTED FINANCIAL DATA

The information is set forth below:


<TABLE>
<CAPTION>
GENICOM CORPORATION AND SUBSIDIARIES
FIVE YEAR FINANCIAL HISTORY                 (UNAUDITED)                       

 Fiscal year, (1)                              1995             1994               1993            1992            1991
 (In thousands, except per                  ----------       ----------         ----------      ----------      ----------
  share and other data)                     
<S>                                        <C>              <C>                <C>             <C>             <C>
 INCOME STATEMENT DATA:

 Revenues                                   $  294,052       $  233,797         $  221,865      $  222,692      $  217,021
 Operating costs and expenses (2)              278,874          224,629            219,220         214,176         224,363
                                            ----------       ----------         ----------      ----------      ----------
 Operating income (loss)                        15,178            9,168              2,645           8,516          (7,342)
 Interest expense, net                           7,741            7,458              7,559           7,742           9,122
 Other income (3)                                                 1,908              1,741
                                            ----------       ----------         ----------      ----------      ----------
 Income (loss) before income taxes
    and extraordinary gain                       7,437            3,618             (3,173)            774         (16,464)
 Income tax expense (benefit)                    1,285            1,048                 56             450             275
                                            ----------       ----------         ----------      ----------      ----------
 Income (loss) before extraordinary gain         6,152            2,570             (3,229)            324         (16,739)
 Extraordinary gain (4)                                                              1,273           3,691
                                            ----------       ----------         ----------      ----------      ----------
 Net income (loss)                          $    6,152       $    2,570         $   (3,229)     $    1,597      $  (13,048)
                                            ==========       ==========         ==========      ==========      ==========
 Earnings (loss) per share (fully
    diluted):
    Income (loss) before                                                                                                   
       extraordinary gain                   $     0.51       $     0.23         $    (0.30)     $     0.03      $    (1.58)
    Extraordinary gain                                                                0.12            0.35
                                            ----------       ----------         ----------      ----------      ----------
 Net income (loss)                          $     0.51       $     0.23         $    (0.30)     $     0.15      $    (1.23)
                                            ==========       ==========         ==========      ==========      ==========
 Weighted average shares (fully 
   diluted)                                     12,056           11,416             10,621          10,833          10,592
                                            ==========       ==========         ==========      ==========      ==========
 BALANCE SHEET DATA:

   Working capital                          $   34,530       $   40,780         $   33,642      $   54,915      $   47,193
   Total assets                                161,539          127,267            141,159         146,806         137,299
   Total debt obligations                       51,544           47,563             69,020          69,311          64,027
   Stockholders' equity                         34,533           28,083             24,575          28,524          27,804

 OTHER DATA:

 Employees (5)                                   1,638           2,382               2,147           2,488           2,512
 Price range per common share:
   Low                                      $    2           $   1              $    1 1/8      $      7/8      $      7/8
   High                                          5 7/8           3 1/4               3 1/2           2               2 3/4

</TABLE>

 (1) The Company's fiscal year ends on the Sunday nearest December 31.
 Accordingly, the Company is reporting for 52-week periods for all years
 presented, except for fiscal year 1992 which is a 53-week period.

 (2) Includes restructuring costs of $1.0 million and $15.0 million in 1993 and
 1991, respectively.  In addition, includes $1.2 16 million for acquisition
 related charges in 1995.

 (3) The company recognized a gain of $0.9 million and $1.7 million from the
 sale of its investment in a Belgian printer development and manufacturing
 company in 1994 and 1993, respectively.  The Company also recognized a gain of
 $1.0 million on the early extinguishment of $9.2 million principal amount of
 its Senior Securities Subordinated Notes in 1994.

 (4) The Company recognized extraordinary gains of $1.3 million and $3.7
 million, net of taxes of $0.1 million and $0.5 million, on the early
 extinguishment of $4.0 million and $13.3 million principal amount of it Senior
 Subordinated Notes in 1992 and 1991, respectively.

 (5) Substantial staff reductions occurred in 1995 as a result of the service
 agreement with ADC.




                                      16
<PAGE>   17
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

GENERAL

GENICOM Corporation ("GENICOM" or the "Company") is comprised of two distinct
operating companies.  The Enterprising Service Solutions company provides logo
and multivendor product field support, depot repair, express parts,
professional services and network information technology and services.  The
Document Solutions company designs and markets page and impact printers for a
variety of business applications as well as related supplies and spare parts.
The production and sales of relay products, which comprises less than 10% of
consolidated revenue, operating income and assets, are included with the
Document Solutions company.

NET REVENUE

In 1995, the Company reported revenue of $294.0 million, an increase of 25.8%
from fiscal 1994.  This growth in revenue was primarily attributable to the
Company's Enterprising Service Solutions company which had total revenues of
$125.6 million in 1995 and reflects internal growth achievements as well as the
effects of the first quarter 1995 business acquisition of Harris Adacom Network
Services, Inc.  The Document Solutions company also demonstrated growth with
total revenue, excluding relays, of $156.7 million.  Relay revenues were $11.7
million, a decrease of $3.4 million from 1994.  Total consolidated revenue was
$233.8 million and $221.9 million for the fiscal years ending January 1, 1995
and January 2, 1994, respectively.

For the fiscal year ending January 1, 1995, revenue was 5.4% higher than for
the fiscal year ending January 2, 1994.  The increase in revenue for 1994 was
primarily attributable to service and supplies revenue which increased $29.1
million and offset a decline in printer revenues of $18.7 million.   Relay
revenues decreased $0.1 million in 1994 as compared to 1993.

ORDER BACKLOG

Order backlog was $47.5 million at December 31, 1995, a decrease of $1.4
million or 2.8% from January 1, 1995.  Order backlog increased $14.8 million or
43.2%  in 1994 as compared with 1993.  The decrease in order backlog in 1995 is
primarily attributable to printers and services but was partially offset by a
significant increase in the relay backlog.  The Company's backlog as of any
particular date should not be the sole measurement used in determining sales
for any future period.

GROSS PROFIT

Gross profit, as a percentage of revenue, experienced a slight increase in 1995
as compared to 1994 due to an improvement in sales of higher margin printer
products.  In 1994, gross margin increased slightly as compared to 1993 as a
result of a larger portion of consolidated revenues being associated with
higher margin products such as spares and supplies.

OPERATING EXPENSES

Operating expenses in 1995 increased in actual dollars but decreased as a
percentage of revenue over 1994. The  increased expenses were primarily
attributable to business growth as well as a result of the Company's
acquisition of Harris Adacom Network Services, Inc.   This comparison was
affected by a non recurring charge in the second quarter of 1995 of $1.2
million for costs representing a proposed acquisition which was terminated and
non-capitalized costs associated with the two acquisitions completed in 1995.
In January 1994, the Company initiated a cost reduction





                                       17
<PAGE>   18
program which included personnel, salary and benefit reductions for the
Company's worldwide operations.

Operating expenses in 1994 as compared with 1993 decreased overall and as a
percentage of revenue, due to  the favorable impact of the Company's January
1994 cost reduction program that included personnel, salary and benefit
reductions for the Company's worldwide operations, partially offset by
increased costs associated with the growth in the service area.

OPERATING INCOME

The Company's operating income increased $6.0 million in 1995 as compared to
1994 as a result of the increased revenues mentioned above and the reduction of
operating expenses as a percent of revenue.  The relay operating loss was $1.4
million in 1995, an increase of $0.4 million from 1994.  Operating income
increased $6.5 million in 1994 compared to 1993 as a result of cost controls
implemented in 1994 and an increase in service and supplies revenue which
yielded a higher gross profit.

INTEREST EXPENSE

Interest expense increased 3.8% or $0.3 million in 1995 as compared to 1994 as
a result of the increase in the Company's borrowings under its senior credit
facility.  These increased borrowings resulted from the Company's 1995 business
acquisitions and increased working capital requirements to support the higher
business activity.

The decrease in interest expense of $0.7 million or 8.7% from 1993 to 1994
reflects the impact of the Company's repurchase of its 12.5% Senior
Subordinated Notes ("Notes") in the second and fourth quarter of 1994 and a
decrease in borrowings as a result of reduced working capital investment.
Interest expense in 1993 was also favorably affected by a first quarter
interest payment receipt from the Internal Revenue Service of $0.6 million
related to the settlement of prior year tax matters.

OTHER INCOME

The Company had no material other income in 1995 as compared to 1994.  This
absence of income compares to 1994 when the Company recognized a pre-tax gain
of $0.9 million on the sale of its remaining investment in Xeikon N.V.,
("Xeikon"), a Belgian printer development and manufacturing company and an
additional pre-tax gain of $1.0 million from the repurchase of Notes.

INCOME TAX

The Company's effective income tax rate for fiscal year 1995 was 17.3% compared
with 29.0% and (1.8)% for fiscal years 1994 and 1993, respectively.  The rate
in 1995 was affected by reversal of a portion of the valuation allowance
associated with the Company's deferred tax assets including certain net
operating loss carryforwards.  Such assets were previously fully reserved due
to uncertainties regarding their ultimate recoverability.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital decreased to $34.5 million in 1995 as compared to
$40.8 million in 1994.  The 1995 decrease was primarily the result of an
increase in long-term debt being classified as current.  In 1994, the Company
had repurchased a sufficient amount of the Notes to meet the sinking fund
payment due in 1995, reducing the portion of debt classified as current.  The





                                       18
<PAGE>   19
Company's current ratio was 1.5 to 1 at the end of fiscal year 1995 compared to
1.9 to 1 at the end of fiscal year 1994.  Cash and cash equivalents increased
$3.6 million since January 1, 1995.

Net cash generated by operations was $16.6 million during 1995.  The major
source of cash was earnings, depreciation and amortization which were partially
offset by an increase in accounts receivable associated with the Company's
significant revenue increase.

During 1995, the Company used $23.8 million of cash for investments.  These
investments related to the acquisition of Harris Adacom Network Services Inc.
and Printer Systems Corporation (see "Other Matters") and  capital expenditures
required to support increased levels of operation as a result of business
growth in services.  The Company does not have any material commitments of
funds for capital expenditures other than to support the current level of
operations.

In 1995, the Company retired $9.0 million of its previously purchased Notes in
fulfillment of its annual sinking fund requirement.  As of December 31, 1995,
the Company had $3.4 million of the Notes in treasury which were applied to the
retirement of all the remaining outstanding Notes in February 1996 (see "Other
Matters").

In December 1995, the Company received $14.5 million as a result of its
agreement with Atlantic Design Company, a subsidiary of Ogden Services
Corporation, ("ADC") (see "Other Matters").  Of the proceeds, $3.0 million was
payment for machinery and equipment which was sold to ADC and $11.5 million was
related to the transfer of inventory to ADC.  The Company continues to
recognize in its financial statements the inventory of $12.3 million associated
with the ADC agreement and a corresponding account payable of $10.5 million as
of December 31, 1995.  It is expected that the Company will have no material
liability with regards to this inventory by the end of the second quarter of
1996.

ENVIRONMENTAL MATTERS

The Company and the former owner of its Waynesboro, Virginia facility, General
Electric Company ("G.E."), have generated and managed hazardous wastes at the
facility for many years as a result of their use of certain materials in
manufacturing processes.  The Company and the United States Environmental
Protection Agency ("EPA") have agreed to a corrective action consent order (the
"Order"), which became effective on September 14, 1990.  The Order requires the
Company to undertake an investigation of solid waste management units at its
Waynesboro, Virginia facility and to conduct a study of any necessary
corrective measures that may be required.  Although the Order is currently
being implemented, it is not possible for the Company to reliably estimate the
total cost of the investigation and the study required by the Order.  If, as a
result of the investigation and study, corrective measures are required, the
Company expects that it will then enter into discussions with the EPA
concerning a further order for that purpose.

The Company has been notified by the EPA that it is one of 700 potentially
responsible parties ("PRPs") under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, for necessary corrective action at a
hazardous waste disposal site in Greer, South Carolina.  In prior years, the
Company arranged for the transportation of wastes to the site for treatment or
disposal.  During 1995, the PRPs entered into an administrative consent order
with EPA under which they will undertake a remedial investigation and
feasibility study.

With respect to the above mentioned actions, the Company believes its share of
the costs of the investigation and any corrective action that may be required
are not likely to have a material effect upon the financial condition, results
of operations or liquidity of the Company.





                                       19
<PAGE>   20
The Company has been named as a defendant in an Original Petition and Petition
for Injunctive Relief filed in August 1995 which alleges that the Company and
certain other defendants are strictly liable for damages allegedly suffered by
the plaintiffs as a result of contamination of groundwater at the
Linn-Faysville Aquifer, in Texas, due to the disposal of dangerous products and
materials at a landfill which is alleged to be the source of the contamination.

The Company is currently unable to make any estimates as to whether this action
will have a material effect upon the financial condition, results of operations
or liquidity of the Company.

OTHER MATTERS

On January 12, 1996, the Company reached an agreement with NationsBank of
Texas, N.A., as agent for a group of banks, ("NationsBank") on $75 million of
credit facilities.  Under the agreement, NationsBank is providing a $35 million
revolving credit facility and two term loans totaling $40 million.  In a
separate  transaction, the Company entered into an interest rate swap
arrangement with NationsBank which fixes the interest rate for five years on a
substantial portion of the debt.  The fixed rate at the time the agreement was
executed averaged 8.25%.  As of February 13, 1996, the Company had $22.2
million available for borrowing under the revolving credit facility.  Principal
payments on the term loans are $3.5 million in 1996, $4 million in 1997 and
1998, $5 million in 1999 and $6 million in 2000.

The Company has used this new credit agreement to retire all the debt
associated with its former credit agreement with CIT and to retire all of the
Company's outstanding Notes.

In December 1995, the Company entered into an agreement for the term of five
years with  Atlantic Design Company, a subsidiary of Ogden Services
Corporation, ("ADC") in which ADC would take over  the Company's manufacturing
operations and employees in McAllen, Texas and Reynosa, Mexico.  The agreement
is automatically renewed unless notice is given.  ADC is committed to
manufacturing all of the Company's impact printer products, printed circuit
boards, related supplies and spare parts.  The Company will retain design,
intellectual and distribution rights.  As part of this agreement, the Company
will be a preferred provider of impact and page printers and multivendor
information technologies service to Ogden Services Corporation.

The Company, as part of the agreement, has agreed to purchase from ADC $54
million of product by April 1997.  In the event that the minimum purchase
commitment is not met, the Company would be required to pay ADC the lost
profits on the amount not achieved.   At December 31, 1995, the Company had
recorded $12.3 million of inventory and a related payable of $10.5 million
associated with a commitment to repurchase certain inventories which were
transferred to ADC during December 1995. It is expected that this inventory
will have been used by the end of the second quarter of 1996 and any remaining
amount will not be material.

GENICOM provides an array of services and products addressing different niches
of the information processing industry, competing against a wide range of
companies from large multi-nationals to small domestic entrepreneurs.  The
Company has the risk of obsolescence due to the rapid change of technology in
the markets in which it competes.

In 1994 and 1995, SFAS No. 114 "Accounting by Creditors for Impairment of a
Loan", SFAS No. 118 "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosure - Amendment of SFAS No. 114", and SFAS No. 119
"Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments" became effective. The implementation of these accounting standards
did not have a material impact on the financial condition, results of
operations or liquidity of the Company.





                                       20
<PAGE>   21
In 1996, SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of" will become effective.  Management
believes this standard will not have a material impact on the financial
condition, results of operations or liquidity of the Company.  SFAS No. 123
"Accounting for Stock-Based Compensation"  will not be adopted by the Company
for accounting purposes, however, the Company will be required to disclose the
effects of this pronouncement on a pro forma basis in 1996.





                                       21
<PAGE>   22
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 GENICOM CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                        DECEMBER 31,          January 1,           January 2,
Year Ended,                                                 1995                 1995                 1994
(In thousands, except per share data)                   ============        ------------         ------------
<S>                                                     <C>                 <C>                  <C>
REVENUES, NET:                                   
    Products                                            $    168,394        $    166,518         $    176,432
    Services                                                 125,658              67,279               45,433
                                                        ------------        ------------         ------------
                                                             294,052             233,797              221,865
                                                        ------------        ------------         ------------
OPERATING COSTS AND EXPENSES:                    
    Cost of revenues:                            
       Products                                              116,842             120,455              129,274
       Services                                              100,771              53,439               36,537
    Selling, general and administration                       52,780              43,015               43,584
    Engineering, research and product development              8,481               7,720                9,825
                                                        ------------        ------------         ------------
                                                             278,874             224,629              219,220
                                                        ------------        ------------         ------------
                                                 
OPERATING INCOME                                              15,178               9,168                2,645
Interest expense, net                                          7,741               7,458                7,559
Other income                                                                       1,908                1,741
                                                        ------------        ------------         ------------
                                                 
INCOME (LOSS) BEFORE INCOME TAXES                              7,437               3,618               (3,173)
Income tax expense                                             1,285               1,048                   56
                                                        ------------        ------------         ------------

NET INCOME (LOSS)                                       $      6,152        $      2,570         $     (3,229)
                                                        ============        ============         ============
                                                 
                                                 
EARNINGS (LOSS) PER COMMON SHARE AND COMMON      
SHARE EQUIVALENT (PRIMARY AND FULLY DILUTED):           $       0.51        $       0.23         $      (0.30)
                                                        ============        ============         ============
                                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND     
    COMMON SHARE EQUIVALENTS OUTSTANDING:        
                                                 
Primary                                                       12,038              11,345               10,621
                                                 
Fully diluted                                                 12,056              11,416               10,621
                                                        ============        ============         ============
</TABLE>




The accompanying notes are an integral part of these financial statements.





                                       22
<PAGE>   23
 GENICOM CORPORATION AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>
                                                                        DECEMBER 31,      January 1,
                                                                            1995             1995
 (In thousands, except share data)                                      ------------      ----------
 <S>                                                                     <C>              <C>
 ASSETS                                                                            
 CURRENT ASSETS:                                                                                   
     Cash and cash equivalents                                           $    4,271       $      673
     Accounts receivable, less allowance for                                           
         doubtful accounts of $1,616 and $1,479                              53,572           37,846
     Other receivables                                                        3,767            2,711
     Inventories                                                             43,079           43,368
     Prepaid expenses and other assets                                        1,432            2,329
                                                                         ----------       ----------
         TOTAL CURRENT ASSETS                                               106,121           86,927
 Property, plant and equipment                                               30,896           26,215
 Goodwill                                                                    21,632            9,293
 Other assets, principally intangibles                                        2,890            4,832
                                                                         ----------       ----------
                                                                         $  161,539       $  127,267
                                                                         ==========       ==========
 LIABILITIES AND STOCKHOLDERS' EQUITY                                              
 CURRENT LIABILITIES:                                                              
     Current portion of long-term debt                                   $    7,070       $      371
     Accounts payable and accrued expenses                                   52,910           37,540
     Deferred income                                                         11,611            8,236
                                                                         ----------       ----------
         TOTAL CURRENT LIABILITIES                                           71,591           46,147
 Long-term debt, less current portion                                        44,474           47,192
 Other non-current liabilities                                               10,941            5,845
                                                                         ----------       ----------
         TOTAL LIABILITIES                                                  127,006           99,184
                                                                                   
 COMMITMENTS AND CONTINGENCIES                                                     
                                                                                   
 STOCKHOLDERS' EQUITY:                                                             
     Common stock, $0.01 par value; 18,000,000 and 15,000,000                      
         shares authorized, 10,839,399 and 10,638,299 shares issued             108              106
     Additional paid-in capital                                              26,023           25,760
     Retained earnings                                                       10,503            4,351
     Foreign currency translation adjustment                                (1,331)           (1,435)
     Pension liability adjustment                                             (770)             (699)
                                                                         ----------       ----------
         TOTAL STOCKHOLDERS' EQUITY                                          34,533           28,083
                                                                         ----------       ----------
                                                                         $  161,539       $  127,267
                                                                         ==========       ==========

</TABLE>



The accompanying notes are an integral part of these financial statements.





                                       23
<PAGE>   24
 GENICOM CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS




<TABLE>
<CAPTION>
 Year ended,                                                         DECEMBER 31,     January 1,     January 2,
 (In thousands)                                                         1995            1995           1994
                                                                     -----------      ----------     ----------
 <S>                                                                   <C>           <C>           <C>     
 CASH FLOWS FROM OPERATING ACTIVITIES:                          

     Net income (loss)                                                  $  6,152      $  2,570      $  (3,229)
     Adjustments to reconcile net income (loss) to cash provided                                
       by operating activities:                                                                 
         Depreciation                                                     13,981         9,374          6,703
         Amortization                                                      4,125         3,149          2,400
         Effect of gain on early extinguishment of notes                                (1,009) 
         Effect of investment gain                                                        (901)        (1,741)
         Acquisition related costs                                           654                
         Effect of restructuring accrual                                                               (3,380)
         Effect of environmental recovery from G.E.                                                      (862)
         Deferred tax benefit                                             (1,830)               
         Changes in assets and liabilities:                                                     
             Accounts receivable                                          (9,406)        1,031          2,099
             Inventories                                                   3,348        10,882          1,710
             Accounts payable and accrued expenses                        (1,730)        2,521          1,733
             Other                                                         1,338           938           (190)
                                                                        --------      --------       --------           
 NET CASH PROVIDED BY OPERATING ACTIVITIES                                16,632        28,555          5,243
                                                                        --------      --------       --------           
 CASH FLOWS FROM INVESTING ACTIVITIES:                                                          
                                                                                                
     Payments for businesses, net of cash acquired                       (10,309)               
     Additions to property, plant and equipment                          (16,325)      (11,067)        (5,724)
     Proceeds from sale of investment                                                    3,436  
     Proceeds from sale of equipment                                       3,031                
     Other investing activities                                             (239)         (581)        (1,456)
                                                                        --------      --------       --------
 NET CASH USED IN INVESTING ACTIVITIES                                   (23,842)       (8,212)        (7,180)
                                                                        --------      --------       --------           
 CASH FLOWS FROM FINANCING ACTIVITIES:                                                          
     Borrowings from long-term debt                                       31,594        21,537         26,818
     Payments on long-term debt                                          (31,939)      (33,985)       (26,697)
     Proceeds from Atlantic Design agreement                              11,502                
     Purchases of senior subordinated notes                                             (8,123) 
                                                                        --------      --------       --------
 NET CASH PROVIDED BY (USED IN)  FINANCING ACTIVITIES                     11,157       (20,571)           121
                                                                        --------      --------       --------
                                                                                                
 Effect of exchange rate changes on cash and cash equivalents               (349)         (896)           612
                                                                        --------      --------       --------
                                                                                                
 Net increase (decrease) in cash and cash equivalents                      3,598        (1,124)        (1,204)
                                                                                                
 Cash and cash equivalents at beginning of year                              673         1,797          3,001
                                                                        --------      --------       --------
                                                                                                
 Cash and cash equivalents at end of year                               $  4,271      $    673       $  1,797
                                                                        ========      ========       ========
                                                                                                
 SUPPLEMENTAL DATA:                                                                             
                                                                                                
 Cash paid (received) during the year for:                                                      
    Income taxes                                                        $  1,483      $     28      $   (501)
    Interest                                                               8,040         7,491          7,953
</TABLE>




The accompanying notes are an integral part of these financial statements.





                                       24
<PAGE>   25

GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY



<TABLE>
<CAPTION>
For the years ended December 31, 1995, January 1, 1995 and January 2, 1994
(In thousands)                                                                                 Foreign
                                            Common Stock                       Additional      Currency        Pension
                                        --------------------      Paid-in      Retained       Translation     Liability
                                        Shares        Amount      Capital      Earnings       Adjustment     Adjustment
                                        ------        ------      -------      --------       -----------    ----------
<S>                                    <C>         <C>        <C>             <C>            <C>              <C>
BALANCE AS OF JANUARY 3, 1993            10,605     $    106    $  25,730      $  5,010       $  (1,795)       $  (527)
                                                                                                          
Exercise of stock options                    17                        14                                 
Net loss                                                                         (3,229)                  
Cumulative translation adjustment                                                                  (162)  
Pension liability adjustment                                                                                      (572)
                                         ------     --------    ---------      --------       ---------       --------
BALANCE AS OF JANUARY 2, 1994            10,622          106       25,744         1,781          (1,957)        (1,099)
                                                                                                          
Exercise of stock options                    16                        16                                 
Net income                                                                        2,570                   
Cumulative translation adjustment                                                                   522   
Pension liability adjustment                                                                                       400
                                         ------     --------    ---------      --------       ---------       --------
BALANCE AS OF JANUARY 1, 1995            10,638          106       25,760         4,351          (1,435)          (699)
                                                                                                          
Exercise of stock options                   201            2          263                                 
Net income                                                                        6,152                   
Cumulative translation adjustment                                                                   104   
Pension liability adjustment                                                                                       (71)
                                         ------     --------    ---------      --------       ---------        -------
BALANCE AS OF DECEMBER 31, 1995          10,839     $    108    $  26,023      $ 10,503       $  (1,331)       $  (770)
                                         ======     ========    =========      ========       =========        =======
</TABLE>




The accompanying notes are an integral part of these financial statements.



                                       25
<PAGE>   26
GENICOM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of GENICOM
Corporation (the "Company") and its wholly-owned subsidiaries.  All significant
intercompany accounts and transactions have been eliminated. The 1995 financial
statements include the results of two acquisitions, Printer Systems Corporation
("PSC") and Harris Adacom Network Services, Inc. ("HANS") from their respective
acquisition dates.  PSC was acquired on February 16, 1995 and HANS was acquired
on March 1, 1995.

Fiscal Year

The Company's fiscal year ends on the Sunday nearest December 31.  Accordingly,
the Company is reporting for the 52-week periods ended December 31, 1995,
January 1, 1995 and January 2, 1994.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.

Inventories

Inventories are stated at the lower of cost, determined on the first-in
first-out method, or market.

Property, Plant and Equipment

Property, plant and equipment is stated at cost.  Depreciation is calculated
using the straight-line method for financial reporting purposes based on
estimated lives at acquisition date (generally 10 to 25 years for buildings and
18 months to 10 years for machinery and equipment) and accelerated methods for
income tax purposes.

Significant improvements and the cost of tooling are capitalized, while repairs
and maintenance costs are charged to operations.

Goodwill and Intangibles

Goodwill includes the excess of acquisition costs over the fair market value of
net assets of acquired businesses and is being amortized on a straight-line
basis over 5 to 20 years.  Intangible assets, including patents, copyrights,
trademarks, licenses and organization and financing costs, are amortized on a
straight-line basis over periods ranging from 3 to 15 years.  The Company
assesses at each balance sheet date whether there has been a permanent
impairment in the value of the respective assets.  This is accomplished by
determining whether projected undiscounted future cash flows from operations
over the remaining life exceed the net book value of the assets as of such
balance sheet date.  The aggregate amount of accumulated amortization for
goodwill and intangibles was $14.5 million and $12.9 million at December 31,
1995 and January 1, 1995, respectively.





                                       26
<PAGE>   27



Research and Development Costs and Capitalized Software

Costs incurred in basic research and development are expensed as incurred.
Certain costs relating to software and product development are capitalized and
amortized over the estimated economic life of the product.

The Company capitalized software costs of $0.1 million and $0.6 million in 1995
and 1994, respectively. The related amortization expenses were $1.2 million and
$1.0 million in 1995 and 1994, respectively.  As of December 31, 1995 and
January 1, 1995, capitalized software, net of amortization, was $0.4 million
and $1.5 million, respectively.

Income Taxes

The Company accounts for income taxes under the liability method in accordance
with SFAS No. 109 "Accounting for Income Taxes".  Certain expenses are
recognized in different periods for financial reporting and Federal income tax
purposes. Research and development credits are recognized as a reduction of
income tax expense in the year they are recognized for Federal tax purposes.
The Company does not provide deferred taxes on the undistributed earnings of
its foreign subsidiaries as such earnings are intended to be permanently
reinvested in those operations.

Foreign Operations

The consolidated balance sheets include foreign assets and liabilities of $54.4
million and $16.0 million as of December 31, 1995, respectively, and $55.5
million and $14.7 million as of January 1, 1995, respectively. The net effects
of foreign currency transactions reflected in income were immaterial in fiscal
years 1995, 1994 and 1993.

Assets and liabilities of most of the Company's foreign operations are
translated into U.S. dollars using exchange rates in effect at the balance
sheet date and results of operations items are translated using the average
exchange rates prevailing throughout the period.  The resulting translation
adjustments are recorded as a separate component of stockholders' equity.  The
Company's Mexican subsidiary, of which the operating assets were transferred to
Atlantic Design Company in December 1995 (see "Note 8"), remeasures its
financial statements in U.S. dollars, as this is the currency of the primary
economic environment in which the entity operates.  Prior to 1993, the Mexican
subsidiary was considered to operate in a highly inflationary economy.
Accordingly, its translation adjustments, which are not material, are included
in results of operations.

Off-Balance Sheet Risk and Concentrations of Credit Risk

The Company periodically hedges against foreign currency fluctuations through
the use of forward exchange contracts.  Gains and losses on contracts to hedge
foreign currency commitments are deferred and accounted for as part of the
commitment transaction except for losses expected to be incurred in future
periods which are recorded when identified.

The forward exchange contracts which the Company uses as hedges are subject to
off-balance sheet market risk.  The Company believes that its risk due to
non-performance by the other parties to these contracts is remote.  The Company
had $4.4 million and $0.6 million of forward exchange contracts outstanding as
of December 31, 1995 and January 1, 1995, respectively.

Financial instruments that potentially subject the Company to concentration of
credit risk consist primarily of receivables.  The Company extends credit to
various customers that are primarily in the computer and computer peripherals
industries.  These specific industries may be similarly affected by economic
factors, however, the Company performs ongoing credit evaluations of its
customers and establishes an allowance for doubtful accounts for specific
customers that it determines to have significant credit risk.





                                       27
<PAGE>   28
Generally, the Company does not require collateral from its customers and has,
historically, not experienced significant credit related losses.

Revenue Recognition and Warranty Costs

Revenues from the sales of products, which include printers and relays, are
recorded when products are shipped to customers.  Revenues from services, which
include service and rentals, are recognized monthly as earned.  Advance
billings for customer maintenance contracts are deferred and amortized over the
contract life on a straight-line basis.  Estimated warranty costs for equipment
sales are provided for in the year of sale.

Net Income (Loss) Per Share

Net income (loss) per common share and common share equivalent is computed by
dividing net income (loss) by the weighted average number of common shares and
dilutive common share equivalents outstanding during each year.  Common share
equivalents include the weighted average number of shares issuable upon the
exercise of outstanding stock options, assuming the applicable proceeds from
such exercise are used to acquire treasury shares.

Recent Accounting Pronouncements

In  1994 and 1995, SFAS No. 114 "Accounting by Creditors for Impairment of a
Loan", SFAS No. 118 "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosure - Amendment of SFAS No. 114", and SFAS No. 119
"Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments" became effective. The implementation of these accounting standards
did not have a material impact on the financial condition, results of
operations or liquidity of the Company.

In 1996, SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of" will become effective.  Management
believes this standard will not have a material impact on the financial
condition, results of operations, or liquidity of the Company.  SFAS No. 123
"Accounting for Stock-Based Compensation" will not be adopted by the Company
for accounting purposes, however, the Company will be required to disclose the
effects of this pronouncement on a pro forma basis beginning in 1996.

Nature of Operations

GENICOM Corporation is an international supplier of network systems, service
and printers.  The Company's Enterprising Service Solutions company provides
logo and multivendor product field support and depot repair, express parts,
integrated network systems, technology consulting, diagnostic and monitoring
services and other professional services.  The Company's Document Solutions
company designs and markets a wide range of computer printer technologies for
general purpose applications.

The Company markets it products and services through several domestic and
international channels including national and regional distributors, value
added resellers and direct sales forces.  GENICOM has positioned its products
as mid-range solutions to corporate customers.   Operating on a worldwide
basis, the Company has operations in the United States, Canada, Europe and
Australia.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the dates of the financial statements
and the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.





                                       28
<PAGE>   29

NOTE 2:SUPPLEMENTAL BALANCE SHEET INFORMATION

<TABLE>
<CAPTION>
 Inventories consist of:


                                                                            DEC. 31,               JAN. 1,
 (in thousands)                                                               1995                   1995
                                                                          ---------              ---------
<S>                                                                      <C>                    <C>
 Raw materials                                                            $   2,594              $  14,354
 Work in process                                                              4,899                  6,639
 Finished goods                                                              23,327                 22,375
 Atlantic Design inventory (see Note 8)                                      12,259
                                                                          ---------              ---------
                                                                          $  43,079              $  43,368
                                                                          =========              =========
<CAPTION>
Property, plant and equipment consists of:


                                                                           DEC. 31,               Jan. 1,
                                                                             1995                   1995
 (in thousands)                                                           ---------              ---------                
 <S>                                                                      <C>                    <C>
 Land                                                                     $     714              $     714
 Buildings                                                                   11,038                 10,406
 Machinery and equipment                                                     77,372                 77,274
 Construction in progress                                                       461                    361
                                                                          ---------              ---------
                                                                             89,585                 88,755
     Less: accumulated depreciation                                          58,689                 62,540
                                                                          ---------              ---------
                                                                          $  30,896              $  26,215
                                                                          =========              =========
<CAPTION>
Accounts payable and accrued expenses consist of:


                                                                           DEC. 31,                Jan. 1,
                                                                             1995                   1995
 (in thousands)                                                           ---------              ---------                
 <S>                                                                      <C>                    <C>
 Trade accounts payable                                                   $  21,388              $  18,918
 Atlantic Design account payable (see Note 8)                                10,500
 Accrued liabilities: Accrued compensation and benefits                       9,088                  8,900
                      Interest                                                1,867                  1,883
                      Other                                                  10,067                  7,839
                                                                          ---------              ---------
                                                                          $  52,910              $  37,540
                                                                          =========              =========
</TABLE>                                                                  










                                      29
<PAGE>   30
NOTE 3: DEBT OBLIGATIONS

<TABLE>
<CAPTION>
Long-term debt consists of:
 (in thousands)                               DEC. 31,             Jan. 1,
                                                1995                1995
                                             ---------          ----------              
 <S>                                         <C>                <C>                 
 Revolving credit notes and term loans       $  12,022          $   10,897
 Senior subordinated notes                      36,364              36,532
 Other subordinated notes                        3,158                 134
                                             ---------          ----------              
                                                51,544              47,563
       Less: current portion                     7,070                 371
                                             ---------          ----------              
                                             $  44,474          $   47,192
                                             =========          ==========
</TABLE>

The Company had an agreement (the "Loan Agreement") with a lender to provide
credit facilities to a maximum borrowing of $35.0 million.  The Loan Agreement
was amended on June 9, 1994, to extend its term to December 30, 1996.  The
Company had pledged as collateral generally all assets of the Company.  The
Loan Agreement provided for financing based on formulas applied to certain
adjusted asset balances, such balances being determined at the lender's sole
discretion, an annual fee of 4.0% of the amount by which average daily
borrowings were below $10.0 million, and interest at a posted prime rate plus
3.0% (11.5% as of December 31, 1995).  Prior to June 9, 1994, the interest rate
was the posted prime rate plus 2.25% (8.25% as of January 2, 1994).   Also, the
Loan Agreement had provisions for automatic renewal for successive one (1) year
terms should certain notice provisions not be exercised by either party.
Moreover, upon the termination of the Loan Agreement by either the lender,
pursuant to an event of default, or the Company, a termination fee was payable
by the Company.

The Company maintained a term loan agreement (the "Term Loan") with the same
lender which amortized monthly and bore the same interest rate.  The Term Loan
would have matured on the earlier of the maturity date of the Loan Agreement or
September 1, 1997.

On January 12, 1996, the Company reached an agreement with NationsBank of
Texas, N.A., as agent for a group of banks, ("NationsBank") on $75 million of
credit facilities.  Under the agreement, NationsBank is providing a $35 million
revolving credit facility and two term loans totaling $40 million.  The
revolver matures in five years; while the term loans are for five and seven
years, respectively.  The rate of interest on the credit facilities is tied to
LIBOR or NationsBank's prime rate and is also dependent upon the Company's
performance.  Principal payments on the term loans are $3.5 million in 1996, $4
million in 1997 and 1998, $5 million in 1999 and $6 million in 2000.

In a separate transaction, the Company entered into an interest rate swap
arrangement with NationsBank which fixes the interest rate for five years on a
substantial portion of the debt.  The fixed rate at the time the agreement was
executed averaged 8.25%.

The proceeds from NationsBank were used to retire the outstanding borrowings
under the Company's prior Loan Agreement.  The principal amount of this payment
was $10.5 million.  The Company recognized a loss on extinguishment of debt
associated with this repayment of $0.3 million after tax in January 1996.

The Company's international subsidiaries maintain various credit facilities for
their local operations. Borrowings under such credit facilities bear interest
at prevailing or negotiated rates.

The Company issued senior subordinated notes (the "Notes") on February 13,
1987, with an aggregate principal amount of $76.0 million.  The Notes, which
bore interest at 12.5% payable semiannually, were redeemable at the option of
the Company, in whole or in part, at any time on or after February 15, 1992.
Sinking fund payments to retire $9.0 million annually began in 1992, with the
Notes maturing on February 15, 1997. The Notes were subordinated to all senior
indebtedness.





                                       30
<PAGE>   31
On February 14 and 15, 1996, the Company used proceeds from the credit
arrangement with NationsBank to retire the remaining outstanding Notes.
Approximately $27 million of the Notes were redeemed at 100% of their face
value and approximately $9.4 million of the Notes were redeemed at 101.2% of
their face value. The Company recognized a $0.1 million after tax loss on
extinguishment of debt associated with the retirement of the Notes in February
1996.

The Company retired $9 million of the Notes in 1995 as part of the sinking fund
requirement.  In 1994 and 1992, the Company used cash flow from operations and
borrowings under the Loan Agreement to purchase $9.2 million and $4.0 million,
respectively, principal amount of its Notes prior to their scheduled maturity.
Such purchases were at market prices below face value and, as a result, the
Company recognized gains of $0.7 million and $1.3 million, net of income taxes
and the write-off of related unamortized discount and debt issuance costs.
Notes purchased by the Company had been applied to the Notes' sinking fund
requirements.

The prior Loan Agreement and the Notes contained certain restrictive covenants
which included, among other things, required minimum net worth of $22.8
million, restrictions on additional borrowing and the sale or disposition of
certain assets and limitations on the payment of dividends.  Under the new
credit facilities with NationsBank, the Company will be subject to certain
other covenants which will require the Company, among other things, to maintain
a consolidated tangible net worth of $10.5 million plus 50 % of cumulative net
income and 100% of cumulative equity transactions, a funded debt coverage ratio
of at least 3.5 to 1 for 1996, a fixed charges coverage ratio of at least 2 to
1 for 1996 and a debt to capitalization ratio of .7 to 1 for 1996.

As part of the purchase agreement with Printer Systems Corporation ("PSC" - see
"Note 12"), the Company has recorded the present value of a note payable with
payments of $400,000 each due in 1996, 1997 and 1998.  In addition to these
payments, the Company has possible contingent payments based on performance due
in 1996, 1997 and 1998.  The maximum amount due under the contingent
arrangement is $2.8 million.

NOTE 4:EMPLOYEE BENEFIT PLANS

The Company provides postretirement medical and life insurance benefits to
hourly and salaried employees hired before March 22, 1993, who retire after
attaining age 60 with at least 5 years of service.  Under certain conditions,
benefits may be extended to the retirees' spouse and dependents.  Salaried
employees hired after March 22, 1993 are eligible for postretirement medical
and life insurance benefits only upon attainment of Social Security retirement
age and completion of 10 years of service, and no spouse or dependent coverage
is provided.

The postretirement medical coverage is contributory, while the life insurance
coverage is noncontributory.

On January 4, 1993, the Company adopted the provisions of SFAS No. 106
"Employers' Accounting for Postretirement Benefits Other Than Pensions", which
requires the accrual of the cost of providing postretirement benefits during an
employee's active service.





                                       31
<PAGE>   32
The components of net periodic postretirement benefit costs were:



<TABLE>
<CAPTION>
                                                                         DEC. 31,                Jan. 1,
 (in thousands)                                                            1995                   1995
                                                                        ---------               --------
 <S>                                                                      <C>                    <C>
 Service cost - benefits attributed to service  during the period        $   337                $   396
 Interest cost on accumulated postretirement benefit obligation            1,339                  1,334
 Amortization of unrecognized transition obligation over 20 years            840                    878
                                                                         -------                -------
 Net periodic postretirement benefit cost                                $ 2,516                $ 2,608
                                                                         =======                =======
</TABLE>



The following table sets forth the combined funded status for the Company's
postretirement benefit obligation as of the indicated actuarial valuation dates:



<TABLE>
<CAPTION>
                                                                              DEC. 31,                Jan. 1,
 (in thousands)                                                                 1995                   1995
                                                                             ---------               ---------
 <S>                                                                         <C>                     <C>
 Accumulated postretirement benefit
  obligation:
    Retirees                                                                 $   7,280               $   9,296
    Active plan participants                                                     8,173                   8,045
                                                                             ---------               ---------
                                                                                15,453                  17,341
 Unrecognized transition obligation                                             14,926                  15,805
 Unrecognized net gain                                                          (5,087)                 (2,309)
                                                                             ---------               ---------
 Accrued postretirement benefit cost                                         $   5,614               $   3,845
                                                                             =========               =========
</TABLE>                                                                     



For measurement purposes, 9.5% and 11.0% annual rates of increase in the per
capita cost of covered health care benefits were assumed for 1996 and 1995,
respectively; both rates were assumed to decrease gradually to 5.5% for 2001
and remain at that level thereafter.  If the health care cost trend rate was to
increase 1.0%, the accumulated postretirement benefit obligation as of December
31, 1995 and January 1, 1995, would have increased by 5.3% and 7.0%,
respectively.  The effect of this change on the aggregate service and interest
costs for 1995 and 1994 would be increases of 5.8% and 7.1%, respectively.  The
weighted-average discount rates used in determining the accumulated
postretirement benefit obligation was 7.25% and 8.0% in 1995 and 1994,
respectively.

Substantially all domestic non-collective bargaining employees are eligible to
participate in the Company's retirement savings plan (the "Savings Plan"),
which qualifies under section 401(k) of the Internal Revenue Code.  The Company
makes certain matching contributions which are allocated to the participants
and vest based on the employee's years of service.  The Company's expense under
the Savings Plan was $0.8 million, $0.5 million and $1.2 million in fiscal
years 1995, 1994 and 1993, respectively.

The Company's domestic collective bargaining employees are covered by a
contributory defined benefit pension plan (the "Pension Plan").  The Pension
Plan benefits are based on years of credited service and the participant's
compensation. Eligible employees must elect to participate and contribute 3.0%
of compensation between $12,000 and $25,650 per calendar year.  The Company
makes contributions to the Pension Plan sufficient to meet federal funding
requirements.





                                       32
<PAGE>   33
Components of periodic pension costs were:


<TABLE>
<CAPTION>
                                                         DEC. 31,           Jan. 1,         Jan. 2,
                                                           1995              1995            1994  
 (in thousands)                                        -------------      ----------      ----------  
 <S>                                                   <C>               <C>             <C>   
 Service cost                                          $         340      $      445      $     442
 Interest cost on projected benefit obligation                   806             731            660
 Actual return on plan assets                                 (2,277)            131           (753)
 Net amortization and deferral                                 1,681            (673)           243
                                                       -------------      ----------      ---------                         
                                                                                            
 Net periodic pension expense                          $         550      $      634      $     592
                                                       =============      ==========      =========
</TABLE>


The following table sets forth the Pension Plan's funded status as of the
indicated actuarial valuation dates:



<TABLE>
<CAPTION>
                                                                                 DEC. 31,               Jan. 1,
 (in thousands)                                                                    1995                   1995
                                                                           -----------------      -----------------
 <S>                                                                       <C>                   <C>    
 Actuarial present value of benefit obligation:
    Vested benefits                                                        $          10,834      $           8,621
    Non-vested benefits                                                                  664                    555
                                                                           -----------------      -----------------
 Total accumulated benefit obligation                                                 11,498                  9,176
 Effect of projected future compensation levels                                          555                    734
                                                                           -----------------      -----------------
 Projected benefit obligation                                                         12,053                  9,910
 Fair value of plan assets                                                            10,912                  8,097
                                                                           -----------------      -----------------

 Fair value of plan assets less than projected benefit obligation                     (1,141)                (1,813)
 Unrecognized net liability existing at January 1, 1987                                  272                    318
 Unrecognized net loss from actuarial experience                                       1,477                  1,753
 Adjustment to recognize minimum liability                                            (1,194)                (1,337)
                                                                           -----------------      -----------------

 Accrued pension cost                                                      $            (586)     $          (1,079)
                                                                           =================      =================
</TABLE>                                                                   



The Company's assumptions used in determining the pension cost and pension
liability shown above were as follows:




<TABLE>
<CAPTION>
                                           DEC. 31,      Jan. 1,       Jan. 2,
                                            1995          1995          1994
                                           --------     --------      --------
 <S>                                       <C>           <C>            <C>
 Discount rate                              7.25          8.00           7.25
 Rate of compensation progression           4.00          5.00           5.00
 Rate of return on plan assets              9.00          9.00           9.00
</TABLE>



Pension Plan assets consist primarily of treasury notes, government and
corporate bonds, corporate equities and cash equivalent funds.

The Company makes contributions to various employee benefit plans for certain
of its foreign subsidiaries and the expense for these plans was not material in
fiscal years 1995, 1994 and 1993.

On January 3, 1994, the Company adopted the provisions of SFAS No. 112
"Employers' Accounting for Postemployment Benefits" which requires employers to
accrue costs of providing





                                       33
<PAGE>   34
postemployment benefits other than pensions.  The implementation of SFAS No.
112 did not have a material effect on the Company's financial condition,
results of operations or liquidity.

NOTE 5: STOCK OPTIONS

Under the Company's stock option plan, 2,112,268 shares of unissued common
stock are reserved for issuance pursuant to options outstanding and to be
granted. Stock option activity for the respective fiscal periods is as follows:




<TABLE>
<CAPTION>                                   
                                                           Option      
                               Number of                   Amount      
                                Shares                   Per Share              Total
                            -------------            ---------------         ------------
 <S>                           <C>                   <C>                     <C>
 OUTSTANDING,                                                          
   JANUARY 3, 1993              1,135,067            $     0.15-7.50         $  1,529,140
     Granted                      406,500                  1.00-1.50              412,500
     Exercised                    (17,000)                 0.15-1.75              (17,975)
     Cancelled                    (42,000)                 0.15-1.50              (51,500)
                            -------------            ---------------         ------------
                                                                       
 OUTSTANDING,                                                          
   JANUARY 2, 1994              1,482,567                  1.00-7.50            1,872,165
     Granted                      460,000                  1.00-2.38              471,688
     Exercised                    (16,600)                    1.00                (16,600)
     Cancelled                   (166,833)                 1.00-7.50             (196,823)
                            -------------            ---------------         ------------
                                                                       
 OUTSTANDING,                                                          
   JANUARY 1, 1995              1,759,134                  1.00-7.50            2,130,430
     Granted                      410,000                  1.75-4.50              804,375
     Exercised                   (201,100)                 1.00-2.13             (264,824)
     Cancelled                   (195,467)                 1.00-7.50             (253,328)
                            =============            ===============         ============
                                                                       
 OUTSTANDING,                                                         
   DECEMBER 31, 1995            1,772,567            $     1.00-7.50         $   2,416,653
                            =============            ===============         =============
 OPTIONS EXERCISABLE,                                                  
   DECEMBER 31, 1995              819,967            $     1.00-7.50         $   1,041,753
                            =============            ===============         =============
 OPTIONS                                    
  AVAILABLE                                 
   FOR FUTURE GRANTS              339,701   
                            =============    
</TABLE>





Options granted under the stock option plan are granted at prices not less than
85.0% of the fair market value of the common stock and become exercisable in
installments at dates ranging from one to ten years from the date of grant, as
determined by the Board of Directors or the Compensation Committee thereof.

In 1992 and 1993, the stockholders approved nonstatutory stock option grants of
100,000 and 10,000 shares of common stock, respectively, to certain members of
the Company's Board of Directors.  The stock options become exercisable at a
rate of 33.3% per year beginning one year from grant date.  However, the stock
options become fully exercisable upon the merger of the Company into another
entity or the acquisition of the Company by another entity or the sale or
transfer of substantially all assets of the Company to another entity.  As of
December 31, 1995, none of these stock options had been exercised.





                                       34
<PAGE>   35
NOTE 6: INCOME TAXES

The components of income (loss) before income taxes were as follows:




<TABLE>
<CAPTION>
 (in thousands)                 DEC. 31,           Jan. 1,           Jan. 2,
                                 1995               1995              1994
                                -------           --------          --------
 <S>                            <C>               <C>               <C>
 Domestic                       $ 7,860           $  4,524          $  1,767
 Foreign                           (423)              (906)           (4,940)
                                -------           --------          --------
                                $ 7,437           $  3,618          $ (3,173)
                                =======           ========          ========
</TABLE>                        

Income tax expense (benefit) consists of the following:




<TABLE>
<CAPTION>
 (in thousands)               DEC. 31,            Jan. 1,          Jan. 2,
                                1995               1995             1994
                              -------             ------           ------
 <S>                         <C>               <C>               <C>
 Current:
   Federal                    $ 2,299             $  164           $  (27)
   State                          557                568               23
   Foreign                        259                148               60
                              -------             ------           ------
                                3,115                880               56
                              -------             ------           ------

 Deferred:
   Federal                     (1,830)               168
   Foreign
                              -------           --------           -----
                               (1,830)               168
                              -------           --------           -----

                              $ 1,285           $  1,048           $  56
</TABLE>                      =======           ========           =====





                                       35
<PAGE>   36
A reconciliation of the U.S. statutory Federal tax rate of 34.0% to the
Company's effective tax rate is as follows:


<TABLE>
<CAPTION>
(in thousands)                                     DEC. 31,             Jan. 1,             Jan. 2,
                                                     1995                1995                 1994
                                                 -----------         -----------           ---------
<S>                                              <C>                 <C>                   <C>
Tax expense (benefit) at statutory rate          $     2,529         $     1,230           $ (1,079)
Increase (decrease) related to:                                        
   State income taxes, net of                                        
     Federal tax benefit                                 557                 568                 23 
   Foreign income tax                                    259                 148                 60 
   Foreign operating losses                                        
     generating no current tax benefit                   144                 279              1,642 
   Domestic operating profit not taxed                                        
     due to carryfoward losses                          (383)             (1,331)              (563)
   Reduction in valuation allowance                   (1,830)                              
   Other, net                                              9                 154                (27)
                                                 -----------         -----------           ---------
                                                 $     1,285         $     1,048           $     56 
                                                 -----------         -----------           ---------
                                                       17.3%               29.0%               (1.8)%
                                                 ===========         ===========           =========
</TABLE>


Deferred tax assets and liabilities are recorded based on temporary differences
between earnings as reported in the financial statements and earnings for income
tax purposes.  The major components of the Company's deferred tax assets and
liabilities are as follows:


<TABLE>
<CAPTION>
(in thousands)                                     DEC. 31,               Jan. 1,
                                                   6/17/05               6/17/05
                                                 -----------           ------------
<S>                                              <C>                   <C>
DEFERRED TAX ASSETS:                         
Net operating loss carryforwards                 $     9,214           $     12,838 
Inventory valuation                                    2,275                  3,475 
Vacation accrual                                       1,231                  1,049 
Bad debt reserve                                         701                    554 
Employee benefits                                      1,884                  1,580 
Other                                                  4,758                     93 
Valuation allowance                                  (12,521)               (16,747)
                                                 -----------           ------------
  Total deferred tax asset                       $     7,542           $      2,842 
                                                 ===========           ============
DEFERRED TAX LIABILITIES:                         
Depreciation                                             263                  1,481 
Other intangible assets                                5,364                
Foreign currency translation gain                                               456 
Other                                                     85                    905 
                                                 -----------           ------------
  Total deferred tax liability                   $     5,712            $     2,842 
                                                 ===========           ============
</TABLE>
                                


                                      36

<PAGE>   37
During 1995, the Company recorded a deferred tax benefit of approximately $1.8
million, relating to the reversal of a portion of the Company's valuation
allowance for its domestic deferred tax assets.  Such assets were previously
fully reserved due to uncertainties regarding their ultimate recoverability.
The benefit was recorded in 1995 based upon management's estimate of amounts
which are expected to be recoverable through future earnings or reversals of
temporary differences.

During 1996, management will continue to assess the recoverability of its
deferred tax assets.  Should domestic earnings continue at levels achieved in
1995, it is possible that the remaining domestic valuation allowance of
approximately $3.0 million will be reversed.

The cumulative amount of undistributed earnings of foreign subsidiaries which
the Company intends to permanently invest and upon which no deferred U.S.
income taxes have been provided is $8.3 million. The Company cannot practically
determine the amount of deferred income tax liability that would result had
such earnings actually been remitted. The amount of foreign withholding taxes,
at current rates, that would have been due on the earnings had they actually
been remitted was $0.4 million.

NOTE 7: OTHER INCOME, ACQUISITION AND RESTRUCTURING COSTS

During 1995, the Company charged against pre-tax income $1.2 million related to
a proposed acquisition which was terminated and non-capitalized costs
associated with the Company's 1995 business acquisitions.

During fiscal 1994, the Company reported gains of $1.0 million from the early
extinguishment of $9.2 million of its Notes.

During fiscal 1994 and 1993, the Company sold 35.0% and 65.0%, respectively, of
its investment in Xeikon N.V., a Belgian printer development and manufacturing
company.  These transactions added approximately $0.9 million and $1.7 million
of pre-tax income to fiscal 1994 and 1993, respectively.

During fiscal 1993, the Company incurred costs totaling $1.0 million associated
with the reorganization and restructuring of the Company's sales and marketing,
development and administrative operations including the formation of an
application solutions function.  Such costs are reflected in the Company's
operating expenses.

NOTE 8: COMMITMENTS AND CONTINGENT LIABILITIES

Leasing arrangements:

As lessee:

The Company leases certain manufacturing and warehousing properties.  Rent
expense amounted to $7.2 million, $6.7 million and $6.3 million in 1995, 1994
and 1993, respectively.

Minimum future lease commitments for operating leases as of December 31, 1995,
are as follows:  1996 - $4.9 million, 1997 - $3.3 million, 1998 - $2.3 million,
1999 - $1.4 million, 2000 - $1.3 million, and $3.9 million thereafter.





                                       37
<PAGE>   38
As lessor:

The Company has rental agreements for the leasing of printers.  Operating lease
terms vary, generally from one to sixty months.  Rental revenue was $2.3
million, $0.7 million and $1.1 million for 1995, 1994 and 1993, respectively.

On December 31, 1995 and January 1, 1995, the cost of equipment leased was $3.0
million and $1.1 million, respectively, which is included in property, plant
and equipment, net of accumulated depreciation of $1.2 million and $0.9
million, respectively.

Environmental matters:

The Company and the former owner of its Waynesboro, Virginia facility, General
Electric Company ("G.E."), have generated and managed hazardous wastes at the
facility for many years as a result of their use of certain materials in
manufacturing processes.  The Company and the United States Environmental
Protection Agency ("EPA") have agreed to a corrective action consent order 
(the"Order"), which became effective on September 14, 1990.  The Order requires
the Company to undertake an investigation of solid waste management units at
its Waynesboro, Virginia facility and to conduct a study of any necessary
corrective measures that may be required.  Although the Order is currently
being implemented, it is not possible for the Company to reliably estimate the
total cost of the investigation and the study required by the Order.  If, as a
result of the investigation and study, corrective measures are required, the
Company expects that it will then enter into discussions with the EPA
concerning a further order for that purpose.

On December 9, 1993, the Company entered into a Cooperation Agreement
("Agreement") with G.E. covering certain environmental matters at the Company's
Waynesboro, Virginia site.  One of the matters covered is the cost of
responding to the Order.  The Agreement provides that G.E. will bear 70.0% of
the allocable costs relating to the Order.  In 1993, the Company recorded a
$1.2 million recovery from G.E. of previously incurred allocable costs relating
to the Order.  The Company's financial statements as of December 31, 1995
reflect a receivable from G.E. of $0.8 million.

As a result of the continuing financial obligation which G.E. has with respect
to releases at the facility and the protracted nature of the investigation, the
Company believes that the costs of the investigation and study and any
corrective action that may be required are not likely to have a material effect
upon the financial condition, results of operations or liquidity of the
Company.

The Company has been notified by the EPA that it is one of 700 potentially
responsible parties (PRPs) under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, for necessary corrective action at a
hazardous waste disposal site in Greer, South Carolina.  In prior years, the
Company arranged for the transportation of wastes to the site for treatment or
disposal.  During 1995, the PRPs entered into  an administrative consent order
with EPA under which they will undertake a remedial investigation and
feasibility study.  Based on information currently available, the Company
believes its share of the costs of the investigation and any necessary
corrective action is not likely to have a material effect upon the financial
condition, results of operations or liquidity of the Company.

The Company has been named as a defendant in an Original Petition and Petition
for Injunctive Relief filed in August 1995 which alleges that the Company and
certain other defendants are strictly liable for damages allegedly suffered by
the plaintiffs as a result of contamination of groundwater at the
Linn-Faysvilles Aquifer, in Texas, due to the disposal of dangerous products
and materials at a landfill which is alleged to be the source of the
contamination.  The Company is currently unable to make any estimates as to
whether this action will have a material effect upon the financial condition,
results of operations or liquidity of the Company.





                                       38
<PAGE>   39
Atlantic Design:

In December 1995, the Company entered into an agreement for the term of five
years with  Atlantic Design Company, a subsidiary of Ogden Services
Corporation, ("ADC") in which ADC would take over the Company's manufacturing
operations and employees in McAllen, Texas and Reynosa, Mexico.  The agreement
is automatically renewed unless notice is given.   ADC is committed to
manufacturing all of the Company's impact printer products, printed circuit
boards, related supplies and spare parts.  The Company will retain design,
intellectual and distribution rights.  As part of this agreement, the Company
will be a preferred provider of impact and page printers and multivendor
information technologies service to Ogden Services Corporation.

The Company as part of the agreement has agreed to purchase from ADC $54.0
million of product by April 1997. In the event the minimum purchase commitment
is not met, the Company would be required to pay ADC the lost profits on the
amount not achieved.  At December 31, 1995, the Company had $12.3 million of
inventory and a related payable of $10.5 million associated with a commitment
to repurchase certain inventories which were transferred to ADC during December
1995.  It is expected that this inventory will have been used by the end of the
second quarter of 1996 and any remaining amount will not be material.

Other matters:

In the ordinary course of business, the Company is party to various
environmental, administrative and legal proceedings.  In the opinion of
management, the Company's liability, if any, in all pending litigation or other
legal proceedings, other than those discussed above, will not have a material
effect upon the financial condition, results of operations or liquidity of the
Company.

NOTE 9: RELATED PARTY TRANSACTIONS

G.E. is one of the principal stockholders of the Company.  Sales by the Company
to G.E. and its affiliates amounted to $2.4 million, $4.6 million and $4.6
million in 1995, 1994 and 1993, respectively.  Amounts receivable from G.E.
were $0.1 million and $1.8 million as of December 31, 1995 and January 1, 1995,
respectively.





                                       39
<PAGE>   40
NOTE 10: SEGMENT AND GEOGRAPHIC INFORMATION

Industry Segments

The Company operates in the serial, line and page printer business where it
designs and markets printers as well as in the related supplies and spare parts
(Document Solutions company).  The Company's operation in services provides
customers with a full range of network information technology and services with
field services, depot repair, parts, logistics and network products
(Enterprising Service Solutions company).  The production and sales of relay
products comprise less than 10% of revenue, operating income and identifiable
assets and are included in the Document Solutions segment.  Revenue between
industry segments are not material.  The Company is reporting segment
information by industry group for only 1995 as prior to 1995 and the
acquisition of Harris Adacom Network Services, Inc., the Company operated only
in one segment,  the computer peripheral sales and service business.

<TABLE>
<CAPTION>
 (in thousands)                                1995
                                           ----------
 <S>                                       <C>
 REVENUES                          
 Document Solutions*                       $  168,394
 Enterprising Service Solutions               125,658
                                           ----------
                                           $  294,052
                                           ==========
 OPERATING INCOME                         
 Document Solutions+                       $    8,349
 Enterprising Service Solutions                 6,829
                                           ----------
                                           $   15,178
                                           ==========
 ASSETS                            
 Document Solutions                        $   85,130
 Enterprising Service Solutions                49,264
 Corporate and other                           27,145
                                           ----------
                                           $  161,539
                                           ==========
 DEPRECIATION AND AMORTIZATION     
 Document Solutions                        $    4,471
 Enterprising Services Solutions                9,487
 Corporate and other                            4,148
                                           ----------
                                           $   18,106
                                           ==========
 CAPITAL EXPENDITURES              
 Document Solutions                        $    2,970
 Enterprising Service Solutions                11,680
 Corporate and other                            1,675
                                           ----------
                                           $   16,325
                                           ==========
</TABLE>

*Includes relay revenues of $11,726 thousand.
+Includes relay operating loss of $1,367 thousand.


Geographic Segments

Transfers (sales) between geographic areas are accounted for at prices
approximating market. Information regarding the Company's operations in the
Pacific Rim, which are not material relative to total operations, has been
combined with its European operations.  Additionally, information regarding the
Company's former Mexican subsidiary has been combined with its U.S. operations
because of the vertical integration and its close proximity to the United
States.





                                       40
<PAGE>   41


Financial information by geographic area:

(in thousands)                                                       
                                                       

<TABLE>
<CAPTION>
                                      United States                                             
FISCAL YEAR 1995                        and Canada              Europe          Eliminations              Consolidated
                                      -------------          ------------      --------------             -------------
<S>                                   <C>                    <C>               <C>                        <C>
Sales to unaffiliated customers       $     231,709          $     62,343                                 $     294,052 
                                                       
Transfers between                                                       
   geographic areas                          39,870                            $     (39,870)               
                                      -------------          ------------      --------------             -------------
                                                       
Total sales                           $     271,579          $     62,343      $     (39,870)             $     294,052 
                                      -------------          ------------      --------------             -------------
                                                       
Operating income                      $      15,021          $        157                                 $      15,178 
                                      -------------          ------------      --------------             -------------
                                                            
Identifiable assets                   $     125,511          $     37,733                                 $     163,244 
                                      =============          ============      ==============             =============
                                                       
<CAPTION>
                                       United States                                             
FISCAL YEAR 1994                        and Canada              Europe          Eliminations               Consolidated
                                      -------------          ------------      --------------             -------------
<S>                                   <C>                    <C>               <C>                        <C>
Sales to unaffiliated customers       $     174,455          $     59,342                                 $     233,797 
                                                                                
Transfers between                                                       
   geographic areas                          41,821                            $     (41,821)               
                                      -------------          ------------      --------------             -------------
                                                       
Total sales                           $     216,276          $     59,342      $     (41,821)             $     233,797 
                                      -------------          ------------      --------------             -------------
                                                       
Operating income (loss)               $       9,262          $        (94)                                $       9,168 
                                      -------------          ------------      --------------             -------------
                                                       
Identifiable assets                   $      97,517          $     29,750                                 $     127,267 
                                      =============          ============      ==============             =============
                                                       
                                                       
<CAPTION>
                                       United States                                             
FISCAL YEAR 1993                        and Canada              Europe          Eliminations               Consolidated
                                      -------------          ------------      --------------             -------------
<S>                                   <C>                    <C>               <C>                        <C>
Sales to unaffiliated customers       $     159,504          $     62,361                                 $     221,865 
                                                       
Transfers between                                                       
   geographic areas                          43,519                            $     (43,519)               
                                      -------------          ------------      --------------             -------------
                                                       
Total sales                           $     203,023          $     62,361      $     (43,519)             $     221,865 
                                      -------------          ------------      --------------             -------------
                                                       
Operating income (loss)               $       6,134          $     (3,489)                                $       2,645 
                                      -------------          ------------      --------------             -------------
                                                       
Identifiable assets                   $     104,461          $     36,698                                 $     141,159 
                                      =============          ============      ==============             =============
</TABLE>
                                                       


Total sales to customers outside the United States amounted to $84.7 million,
$72.3 million and $73.5 million for 1995, 1994 and 1993, respectively; these
amounts include export sales from the United States of $1.1 million, $1.5
million and $1.5 million in 1995, 1994 and 1993, respectively. 




                                      41
<PAGE>   42



NOTE 11:      SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)


(in thousands, except per share data)
                                                            
                                                             

<TABLE>
<CAPTION>
                                                       QUARTER                                                  
                    -------------------------------------------------------------------------------
1995                    FIRST                  SECOND                  THIRD               FOURTH     
                    ------------           ------------           ------------         ------------
<S>                 <C>                    <C>                    <C>                  <C>
Revenues            $     68,134           $     71,842           $     78,506         $     75,570      
Operating income           3,517                  3,724                  4,070                3,867      
Net income                 1,301                  1,559                  1,703                1,589      
Earnings per share:                                                            
    Primary                 0.11                   0.13                   0.14                 0.13      
    Fully diluted           0.11                   0.13                   0.14                 0.13      

<CAPTION>                                                            
                                                       QUARTER                                                  
                    -------------------------------------------------------------------------------
1994                    FIRST                  SECOND                  THIRD               FOURTH     
                    ------------           ------------           ------------         ------------
<S>                 <C>                    <C>                    <C>                  <C>
Revenues            $     55,336           $     59,325           $     57,350         $     61,786      
Operating income           1,322                  3,196                  2,408                2,242      
Net income                    94                  1,502                    486                  488      
Earnings per share:                                                            
    Primary                 0.01                   0.13                   0.04                 0.04      
    Fully diluted           0.01                   0.13                   0.04                 0.04      
</TABLE>



NOTE 12: BUSINESS ACQUISITIONS


PRINTER SYSTEMS CORPORATION

On February 16, 1995, the Company acquired Printer Systems Corporation ("PSC"),
a privately held company whose primary business is the design, manufacture,
distribution and support of printer networking products for commercial
customers.  PSC had 1994 revenues of approximately $10.0 million.  Pursuant to
the purchase agreement, the Company acquired all of PSC's outstanding common and
preferred shares for consideration aggregating to potentially $4.8 million.  Of
the consideration $0.8 million was payable at closing and $1.2 million is
payable over the three subsequent years to closing.  The remaining balance of up
to $2.8 million in consideration is contingent upon attainment of performance
objectives during the three years subsequent to closing, and will be funded from
the Company's cash flows from operations and credit facilities.  The acquisition
has been accounted for as a purchase.  The goodwill associated with the purchase
is being amortized over seven years.

HARRIS ADACOM NETWORK SERVICES, INC.

On March 1, 1995, the Company acquired substantially all of the assets and
certain liabilities of Harris Adacom Network Services, Inc. ("HANS"), including
all of the stock of its Canadian subsidiary, Harris Adacom Inc. for cash and
notes totaling $7.3 million. The assets acquired relate to HANS' service depot
facility, field service operations, systems integration business, and network
baselining and monitoring operations.  HANS had 1994 revenues of  approximately
$36.1 million.  The purchase price was funded from the Company's cash flows from
operations and credit facilities 



                                      42
<PAGE>   43
and the acquisition has been accounted for as a purchase. The goodwill
associated with the purchase is being amortized over ten years.

PRO FORMA FINANCIAL INFORMATION

Presented below are the unaudited pro forma statements of operations as if the
acquired operations had been integrated into the Company effective January 3,
1994.  Accounting adjustments have been made in the pro forma financial
information to include estimated costs of the combinations and to reflect the
integration and consolidation of facilities and personnel.  Included in such
integration costs are lease termination fees and relocation costs associated
with redundant facilities and employee severance expenses.  This pro forma
information has been prepared for comparative purposes only and does not
purport to be indicative of the results that actually would have been obtained
if the acquired operations had been conducted by the Company during the periods
presented, and is not intended to be a projection of future results.
Presentation is in thousands except for earnings per share amounts.




<TABLE>
<CAPTION>
                                                        Period Ended                    Period Ended
                                                     December 31, 1995                 January 1, 1995
                                                     -----------------                 ---------------
 <S>                                                    <C>                               <C>                                 
 Revenue                                                $  302,416                        $   279,984
 Pre-Tax Income                                              7,527                              2,636
                                                        ----------                         ----------
 Net Income                                                  6,019                              1,370
                                                        ----------                         ----------
 Earnings per share                                     $     0.50                        $      0.12
                                                        ----------                         ----------
 Weighted average share outstanding                         12,056                             11,416
                                                        ----------                         ----------
</TABLE>                                                





ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.





                                       43
<PAGE>   44
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is set forth under the caption "Election
of Directors" in the registrant's Proxy Statement for its 1996 annual meeting
of stockholders, to be mailed to each stockholder on or about March 31, 1996,
which information is incorporated herein by reference and under the heading
"Executive Officers of the Registrant" appearing on page 14 of this report.


ITEM 11.  EXECUTIVE COMPENSATION

The information required by this item is set forth on pages 4 through 15 of the
registrant's Proxy Statement for its 1996 annual meeting of stockholders, to be
mailed to each stockholder on or about March 31, 1996, which information is
incorporated herein by reference.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is set forth under the caption "Principal
Stockholders of the Company" in the registrant's Proxy Statement for its 1996
annual meeting of stockholders, to be mailed to each stockholder on or about
March 31, 1996, which information is incorporated herein by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is set forth under the caption "Certain
Transactions" in the registrant's Proxy Statement for its 1996 annual meeting
of stockholders, to be mailed to each stockholder on or about March 31, 1996,
which information is incorporated herein by reference.


                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  Financial Statements and Schedules

         The  financial statement schedules filed as part of this report are
         listed in the Index to Financial Statements and Schedules on page F-1
         immediately following the signatures to this report.





                                       44
<PAGE>   45
Exhibits Included in Response to Item 601 of Regulation S-K

 NUMBER      DESCRIPTION
 ------      -----------


   3.1       Restated Certificate of Incorporation effective as of June 15,
             1992, incorporated by reference to Exhibit 4.1 to Form S-8
             Registration Statement (No. 33-49472) filed with the Commission on
             July 10, 1992.


   3.2       By-laws, dated June 1, 1983, as amended January 23, 1989 -
             incorporated by reference to Exhibit 3.2 to Form 10-K filed with
             the Commission on March 29, 1989.


   4.1       Indenture, between GENICOM Corporation and Bankers Trust Company
             (the "Trustee"), dated February 13, 1987 - filed herewith.  First
             Supplemental Indenture dated as of March 22, 1991 - incorporated
             by reference to Exhibit 4.1  to Form S-1 Registration Statement
             (No. 33-23007) filed with the Commission on May 14, 1991.


  10.1       Loan and Security Agreement, dated September 25, 1990 between
             GENICOM Corporation and The CIT Group/Credit Finance, Inc. (as
             successor by assignment to Fidelcor Business Credit Corporation) -
             incorporated by reference to Exhibit 4.1 to Form 10-Q filed with
             the Commission on November 13, 1990.  First Amendment dated May 1,
             1991 and Second Amendment dated March 3, 1992 - incorporated by
             reference to Exhibit 10.1 to Form 10-K filed with the Commission
             on March 24, 1992. Extension of and Amendment to Financing
             Agreements dated September 23, 1992 in reference to the Loan and
             Security Agreement, dated September 25, 1990 between GENICOM
             Corporation and The CIT Group/Credit Finance, Inc. - incorporated
             by reference to Exhibit 10.1 to Form 8-K filed with the Commission
             on October 6, 1992.  Extension of and Amendment to Financing
             Agreements dated June 9, 1994 in reference to the Loan and
             Security Agreement, dated September 25, 1990 between GENICOM
             Corporation and The CIT Group/Credit Finance, Inc. - incorporated
             by reference to Exhibit 10.1 to Form 8-K/A filed with the
             Commission on July 15, 1994.


  10.2       Registration Rights Agreement, dated October 21, 1983, among the
             Company and the several Purchasers named therein - incorporated by
             reference to Exhibit 10.2 to the Form S-1 Registration Statement
             (No. 33-5458) filed with the Commission on June 25, 1986 (the
             "June 25, 1986 Registration Statement").



  10.3       Registration Rights Agreement, dated December 20, 1984, among the
             Company and the several Purchasers named therein - incorporated by
             reference to Exhibit 10.3 to the June 25, 1986 Registration
             Statement.


  10.4       Registration Rights Agreement, dated December 20, 1984, among the
             Company and the several Purchasers named therein - incorporated by
             reference to Exhibit 10.4 to the June 25, 1986 Registration
             Statement.


  10.5       Registration Rights Agreement, dated January 3, 1985, among the
             Company and the several Purchasers named therein - incorporated by
             reference to Exhibit 10.5 to the June 25, 1986 Registration
             Statement.


  10.6       Registration rights provisions contained in a Stock Purchase
             Warrant dated October 21, 1983 granted by the Company in favor of
             General Electric Company, which Stock Purchase Warrant became void
             after October 21, 1988 - incorporated by reference to Exhibit 10.6
             to the June 25, 1986 Registration Statement.





                                      45
<PAGE>   46
 NUMBER       DESCRIPTION
 ------       -----------

 10.7#        Stock Option Plan, as amended and restated, effective as of
              February 7, 1991 - incorporated by reference to Exhibit 10 to the
              Registrant's Quarterly Report on Form 10Q (File No. 0-14685) for
              the quarter ended March 31, 1991 filed with the Commission on May
              15, 1991.  First Amendment to the Registrant's Stock Option Plan,
              dated February 3, 1992 - incorporated by reference to Exhibit 4.2
              to Form S-8 Registration Statement (No. 33-49472) filed with the
              Commission on July 10, 1992. Second Amendment to the Registrant's
              Stock Option Plan, dated January 17, 1994 - incorporated by
              reference to Exhibit 4 to Form S-8 Registration Statement (No.
              33-53843) filed with the Commission on May 27, 1994.

 10.8#        Deferred Compensation and Savings Plan, as amended and restated,
              effective as of January 2, 1989 - incorporated by reference to
              Exhibit 10.8 to Form 10-K filed with the Commission on March 29,
              1991.  First Amendment to the Deferred Compensation and Savings
              Plan, dated as of November 1, 1993 - incorporated by reference to
              Exhibit 10.1 to Form 8-K filed with the Commission on March 30,
              1995.  Second Amendment to the Deferred Compensation and Savings
              Plan, dated as of January 20, 1994 - incorporated by reference to
              Exhibit 10.2 to Form 8-K filed with the Commission on March 30,
              1995.

 10.9#        Defined Benefit Pension Plan for Hourly Employees, as amended and
              restated, effective as of January 1, 1989 -  incorporated by
              reference to Exhibit 10.9 to Form 10-K filed with the Commission
              on March 29, 1991.

 10.10#       Incentive Compensation Plan, as amended - incorporated by
              reference to Exhibit 10.13 to the June 25, 1986 Registration
              Statement.

 10.11        Lease agreement with respect to the Company's customer service
              facilities in Waynesboro dated August 1, 1988 - incorporated by
              reference to Exhibit 10.10 to Form 10-K filed with the Commission
              on March 29, 1989.  Lease agreement with respect to the Company's
              manufacturing facilities in Waynesboro - incorporated by
              reference to Exhibit 10.11 to Form 10-K filed with the Commission
              on March 24, 1992.

 10.12        Lease of McAllen, Texas facility, dated January 20, 1992 -
              incorporated by reference to Exhibit 10.12 to Form 10-K filed
              with the Commission on March 24, 1992.

 10.13#       Terms of employment of Paul T. Winn dated March 26, 1990 -
              incorporated by reference to Exhibit 10.15 to Form S-1
              Registration Statement (No. 33-23007) filed with the Commission
              on May 17, 1990.

 10.14 Yen    Agreement Between GENICOM Corporation and TOSHIBA Corporation
              Relating to Laser Printer G751, Laser Printer G750 and Related
              Options, Supplies and Service Parts, dated March 31, 1992 -
              incorporated by reference to Exhibit 10.17 to Form 10-K filed
              with the Commission on March 31, 1993.

 10.15        Agreement with the General Electric Company regarding
              environmental matters at the Registrants Waynesboro, Virginia
              facility, dated December 9, 1993 - incorporated by reference to
              Exhibit 10.1 to Form 8-K filed with the Commission on February
              23, 1994.





                                      46
<PAGE>   47

 NUMBER       DESCRIPTION
 ------       -----------
 10.16        Lease of Bedford and Framingham, Massachusetts facilities, dated
              March 11, 1994 - incorporated by reference to Exhibit 10.1 and
              10.2, respectively to Form 8-K filed with the Commission on May
              31, 1994.

 10.17        Consulting agreement between GENICOM Corporation and W. Allen
              Surber, dated October 11, 1994 - incorporated by reference to
              Exhibit 10.17 to Form 10-K filed with the Commission on March 31,
              1995.

 10.18#       Consulting agreement between GENICOM Corporation and Edward E.
              Lucente, dated December 6, 1994 - incorporated by reference to
              Exhibit 10.18 to Form 10-K filed with the Commission on March 31,
              1995.

 10.19        Agreement to purchase Harris Adacom Network Services, Inc., dated
              February 23, 1995 - incorporated by reference to Exhibit 2.1 to
              Form 8-K filed with the Commission on March 16, 1995.

 10.20        Financing agreement with NationsBank, dated January 12, 1996 -
              incorporated by reference to Exhibit 10.1 to Form 8-K filed with
              the Commission on March 12, 1996.

 10.21        Manufacturing agreement between GENICOM Corporation and Atlantic
              Design Company - incorporated by reference to Exhibit 10.21 to
              Form 10-K filed with the Commission on March 28, 1996 -  filed
              herewith.

 11           Statement regarding the Company's computation of earnings per
              share - filed herewith.

 22           Subsidiaries of the Registrant - filed herewith.

 24           Consent of Independent Accountants - filed herewith.

 27           Financial Data Schedule - Filed only with EDGAR version.

 (b)          Reports on Form 8-K


              The Company did not file a Form 8-K during the quarter ended
              December 31, 1995.





 Yen  Confidential treatment granted with respect to certain provisions
      pursuant to 17 C.F.R. 200.80 (b) (4).

 #    Management contracts or compensatory plans.





                                      47
<PAGE>   48
                                  SIGNATURES

Pursuant to the requirement 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.

                                GENICOM Corporation
                           BY:  Paul T. Winn
                                ------------------------------

                                Paul T. Winn
                                President and Chief Executive
                                Officer

Pursuant to the requirement 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 and on the dates indicated.


<TABLE>
<CAPTION>
 SIGNATURE                             TITLE                                      DATE
 --------------------      -------------------------------------               ---------------
 <S>                      <C>                                                  <C>
 Don E. Ackerman           Chairman of the Board and Director                   March 28, 1995
 -------------------                                                    
 Don E. Ackerman     
                     
 Paul T. Winn             President and Chief Executive Officer                 March 28, 1995
 ------------------       and Director (Principal Executive Officer)              
 Paul T. Winn             
                     
 James C. Gale            Senior Vice President Finance and Chief               March 28, 1995
 ------------------       Financial Officer (Principal Financial Officer)             
 James C. Gale            
                     
 Edward E. Lucente        Director                                              March 28, 1995
 ------------------                    
 Edward E. Lucente   
</TABLE>





                                       48
<PAGE>   49

                      GENICOM CORPORATION AND SUBSIDIARIES

                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES



                                           
                                                                  PAGE
                                                                  ----
 Independents Accountants' Report                                  F-2

 Financial Statement Schedules:

 Schedule  II     Valuation and Qualifying Accounts and Reserves   F-3





1.  All other schedules have been omitted since the required information is not
    present in amounts sufficient to require submission of the schedules.

                                     F - 1





<PAGE>   50
INDEPENDENT ACCOUNTANTS' REPORT



The Board of Directors and Stockholders of GENICOM Corporation:


We have audited the accompanying consolidated balance sheets of GENICOM
Corporation and Subsidiaries (the "Company") as of December 31, 1995 and
January 1, 1995, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three fiscal years in the
period ended December 31, 1995.  We have also audited the financial statement
schedules listed in the index on page F-1 of this Form 10-K.  These financial
statements and financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of GENICOM
Corporation and Subsidiaries as of December 31, 1995 and January 1, 1995, and
the consolidated results of their operations and their cash flows for each of
the three fiscal years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.  In addition, in our opinion, the
financial statement schedules referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.

As discussed in Note 4 to the financial statements, effective January 4, 1993,
the Company changed its method of accounting for postretirement benefits other
than pensions.




Coopers & Lybrand L.L.P.

Washington, D.C.
January 31, 1996,
 except for certain information in Note 3,
 for which the date is February 15, 1996





                                     F - 2
<PAGE>   51
                     GENICOM CORPORATION AND SUBSIDIARIES

        SCHEDULE II  - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                                (In thousands)

<TABLE>
<CAPTION>
                                                            ADDITIONS
                                        BALANCE AT         CHARGED TO          DEDUCTIONS       BALANCE AT
            DESCRIPTION                 BEGINNING             COSTS               FROM            END OF
                                        OF PERIOD         AND EXPENSES          RESERVES          PERIOD
 ------------------------------         -----------       -------------        -----------      ----------
 <S>                                    <C>                <C>                 <C>               <C>
 ALLOWANCE FOR DOUBTFUL
 ACCOUNTS

 Year ended:

 JANUARY 2, 1994                         $ 1,248            $   812(1)            $   580          $ 1,480
                                                                                                   
 JANUARY 1, 1995                         $ 1,480            $   365(1)            $   366          $ 1,479
                                                                                                   
 DECEMBER 31, 1995                       $ 1,479            $ 1,284(1)            $ 1,147          $ 1,616
                                                                                                   
                                                                                                   
 ALLOWANCE FOR INVENTORY
 OBSOLESCENCE

 Year ended:

 JANUARY 2, 1994                        $  6,853          $   2,367(2)          $   2,483         $  6,737
                                           
 JANUARY 1, 1995                        $  6,737          $   2,723(2)          $   3,302         $  6,158
                                           
 DECEMBER 31, 1995                      $  6,158          $   2,292(2)          $     305         $  8,145
</TABLE>                                   





1. "Additions" to the allowance for doubtful accounts include a foreign
   currency translation adjustment of $46, $56, and $(48)  in 1995, 1994 and 
   1993, respectively. Net bad debt expense for 1995, 1994 and 1993 was $1,238,
   $309 and $859, respectively.

2. Foreign currency translation adjustments were immaterial in 1995, 1994 and
   1993.

                                     F - 3
<PAGE>   52

                      GENICOM CORPORATION AND SUBSIDIARIES

                         INDEX TO EXHIBITS TO FORM 10-K
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995




<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER            DESCRIPTION                                                                  PAGE     
 -------           -----------                                                                  ----     
 <S>               <C>                                                                       <C>      
 10.21             Manufacturing agreement between GENICOM and Atlantic Design Company       E-2 - E-35  
                                                                                                         
 11                Statement regarding computation of per share earnings                        E-36     
                                                                                                         
 22                Subsidiaries of the Registrant                                               E-37     
                                                                                                         
 23                Consent of Independent Accountants                                           E-38     
                                                                                                         
 27                Financial Data Schedule                                                    Filed only 
                                                                                             with EDGAR  
                                                                                               version   
</TABLE>




                                      E-1