<PAGE>   1
                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934 
For the quarterly period ended March 31, 1998
                                       or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 
For the transition period from __________________to________________.



                            Commission Number 0-24303

                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE                                                              11-2162982
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

                             45085 UNIVERSITY DRIVE
                          ASHBURN, VIRGINIA 20147-2745

               (Address of Principal Executive Offices) (Zip Code)
        Registrant's telephone number, including area code (703) 729-6400





         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X]



Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 12, 1998:


   Class                                         Number of Shares Outstanding

Common Stock, Par Value $.01 Per Share                 15,549,675 Shares
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                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION



                                                                            PAGE
                                                                            ----

                          PART I: FINANCIAL INFORMATION


ITEM 1:  FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
March 31, 1998 (Unaudited) and December 31, 1997..........................   3  
                                                                             
                                                                             
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)                                
Three Months Ended March 31, 1998 and 1997................................   4
                                                                             
                                                                             
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited).........................   5
Three Months Ended March 31, 1998 and 1997                                   
                                                                             
                                                                             
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)....................   6
                                                                             
                                                                             
ITEM 2:    MANAGEMENT'S DISCUSSION AND ANALYSIS OF                           
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................   7-9
                                                                             
                                                                             
                           PART II: OTHER INFORMATION                        
                                                                             
                                                                             
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K..................................   10
                                                                             
SIGNATURES................................................................   11
                                                                             
EXHIBIT- 11 COMPUTATION OF NET INCOME PER SHARE...........................   12
                                                                             
EXHIBIT- 27 FINANCIAL DATA                                                   
SCHEDULE..................................................................   13
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                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                      (AMOUNTS IN THOUSANDS EXCEPT SHARES)

<TABLE>
<CAPTION>
                                                                             MARCH 31,         DECEMBER 31,
          ASSETS                                                               1998                1997
                                                                            -----------        ------------
                                                                            (UNAUDITED)
<S>                                                                         <C>                <C>    
Current assets:
          Cash and cash equivalents                                           $20,544            $18,331
          Short term investments                                                8,068              7,849
          Accounts receivable - trade, less allowances                                        
              ($765-1998 and $547 -1997)                                       17,049             15,826
          Inventories                                                           3,479              2,846
          Other current assets                                                  1,791              1,315
                                                                              -------            -------
            Total current assets                                               50,931             46,167
                                                                                              
Property, plant and equipment                                                                 
          Building and leasehold improvements                                     328                328
          Machinery and equipment                                              10,936              9,406
          Furniture and fixtures                                                1,695              1,582
                                                                              -------            -------
                                                                               12,959             11,316
          Less accumulated depreciation                                         5,099              4,392
                                                                              -------            -------
                                                                                7,860              6,924
                                                                                              
Other long term assets                                                          2,076              2,376
                                                                              -------            -------
                                                                                              
          Total Assets                                                        $60,867            $55,467
                                                                              =======            =======
                                                                                              
          LIABILITIES AND STOCKHOLDERS' EQUITY                                                
                                                                                              
Current liabilities:                                                                          
          Accounts payable                                                    $ 1,545            $ 1,002
          Accrued expenses                                                      3,338              4,494
          Income taxes payable                                                  4,183              2,315
                                                                              -------            -------
                                                                                              
            Total current liabilities                                           9,066              7,811
                                                                                              
Non-current liabilities:                                                                      
          Deferred taxes                                                          242                242
                                                                              -------            -------
                                                                                              
          Total liabilities                                                     9,308              8,053
                                                                              -------            -------
                                                                                              
                                                                                              
Stockholders' equity:                                                                         
          Common stock, par value $.01 a share; authorized - 30,000,000                       
             shares; issued and outstanding,15,543,000 shares - 1998                          
             and 15,132,000 shares - 1997                                         155                153
          Additional paid-in capital                                           12,729             12,291
          Retained earnings (from December 31, 1993)                           38,675             34,970
                                                                              -------            -------
                                                                                              
          Total stockholders' equity                                           51,559             47,414
                                                                              -------            -------
                                                                                              
          Total Liabilities and Stockholders' Equity                          $60,867            $55,467
                                                                              =======            =======
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.


                                       3
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                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                 (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



<TABLE>
<CAPTION>
                                                                         (Unaudited)
                                                                      Three Months Ended
                                                                           March 31,
                                                                   ------------------------
                                                                     1998            1997
                                                                   --------        --------
<S>                                                                <C>             <C>     
Net sales                                                          $ 19,267        $ 16,007

Cost of  sales                                                        7,335           5,499
                                                                   --------        --------

     Gross profit                                                    11,932          10,508
                                                                   --------        --------

Operating Expenses:
       Selling                                                        3,075           3,039
       Product development and engineering                            2,453           1,907
       General and administrative                                     1,210           1,216
                                                                   --------        --------
Total operating expenses                                              6,738           6,162
                                                                   --------        --------
Operating Income                                                      5,194           4,346
       Interest income, net                                            (420)           (193)
                                                                   --------        --------
Income before income taxes                                            5,614           4,539

Income tax expense                                                    1,909           1,634
                                                                   --------        --------

       Net income                                                  $  3,705        $  2,905
                                                                   ========        ========

 Net income per common share
                   Basic                                           $   0.24        $   0.19
                   Diluted                                         $   0.24        $   0.19

Weighted average common and dilutive potential common shares
                   Basic                                             15,489          15,140
                   Diluted                                           15,758          15,510
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.


                                       4
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                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                              (UNAUDITED)
                                                                           THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                        ------------------------
                                                                          1998            1997
                                                                        --------        --------
<S>                                                                     <C>             <C>     
OPERATING ACTIVITIES:

Net income                                                              $  3,705        $  2,905

Adjustments to reconcile net income to cash provided by operating
activities:

     Depreciation and amortization                                           764             459

Changes in working capital items:
      Receivables                                                         (1,223)         (2,484)
      Inventories                                                           (633)            134
      Other current assets and other assets                                 (233)            (53)
      Accounts payable                                                       543              35
      Accrued expenses                                                    (1,156)            (32)
      Income taxes payable                                                 1,868           1,259
                                                                        --------        --------

CASH PROVIDED BY OPERATING ACTIVITIES                                      3,635           2,223
                                                                        --------        --------

INVESTING ACTIVITIES:
     Purchase of short term investments, net                                (219)            (90)
     Expenditures for property, plant and equipment                       (1,643)           (882)
                                                                        --------        --------

CASH  USED IN INVESTING ACTIVITIES                                        (1,862)           (972)
                                                                        --------        --------

FINANCING ACTIVITIES:
     Exercise of stock options                                               440              90
                                                                        --------        --------

CASH PROVIDED BY FINANCING ACTIVITIES                                        440              90
                                                                        --------        --------

Increase in cash and cash equivalents                                      2,213           1,341

CASH AND CASH EQUIVALENTS- BEGINNING OF PERIOD                            18,331           9,251
                                                                        --------        --------

CASH AND CASH EQUIVALENTS - END OF PERIOD                               $ 20,544        $ 10,592
                                                                        ========        ========

Supplemental disclosure of cash flow information
   Cash paid for:
     Interest                                                           $   --          $   --
     Income taxes                                                       $     69        $    144
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


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                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(A)   BASIS OF PRESENTATION

         The consolidated balance sheet as of March 31, 1998, the consolidated
      statements of income for the three months ended March 31, 1998 and 1997,
      and the consolidated statements of cash flows for the three months ended
      March 31, 1998 and 1997 have been prepared in accordance with generally
      accepted accounting principles by the Company without audit. In the
      opinion of management, all adjustments (which include only normal
      recurring adjustments) necessary to present fairly the financial position,
      results of operations and changes in cash flows for all periods presented
      have been made. Interim results are not necessarily indicative of results
      expected for the full year.

         These financial statements do not include all disclosures associated
      with annual financial statements. Accordingly, these statements should be
      read in conjunction with the Company's financial statements and notes
      thereto contained in the Company's Form 10-K for the year ended December
      31, 1997.                                                               

(B)   INVENTORIES
                              
          Inventories are stated at the lower of standard cost, which
          approximates actual cost (FIFO basis), or market, and consists of the
          following:                                                 

<TABLE>
<CAPTION>
($000'S)                                            MARCH 31,          DECEMBER 31,
                                                      1998                 1997
                                                    ---------          ------------
<S>                                                 <C>                <C>   
Raw materials                                        $3,242               $2,160
Work-in-progress                                         72                  510
Finished goods                                          165                  176
                                                     ------               ------

                                                     $3,479               $2,846
                                                     ======               ======
</TABLE>


                                       6
<PAGE>   7
                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

PROPOSED MERGER

         On February 16, 1998, the Company announced a merger agreement under
which the Company will become a subsidiary of Tellabs, Inc. All outstanding
shares of the Company stock will be exchanged at the ratio of .72 share of
Tellabs common stock for each share of Coherent common stock. Based on the
closing price of Tellabs common stock on May 13, 1998, the transaction is valued
at approximately $800 million. The transaction is expected to be accounted for
as a pooling of interests and to qualify as a tax-free reorganization. On May
12, 1998, the shareholders and the Board of Directors, by a majority vote,
approved the acquisition. The proposed merger is subject to review by the
Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of
1976. The Department of Justice has requested additional information and
Coherent and Tellabs are complying with that request. Currently that review is
underway. Prior to the closing of the merger, the Company has agreed to certain
restrictions including limitations on capital expenditures and dividends, among
others.

      RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, selected statements
of income data as a percentage of net sales:

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                                 MARCH 31,
                                                           --------------------
                                                           1998           1997
                                                           ----           ----
<S>                                                        <C>            <C> 
Net Sales                                                   100%           100%

      Cost of sales                                          38             34
                                                           ----           ----

Gross Profit                                                 62             66

Operating expenses
      Selling and marketing                                  16             19
      Product development and engineering                    13             12
      General and administrative                              6              7
      Interest income, net                                   (2)            (1)
                                                           ----           ----

      Total expenses                                         33             37
                                                           ----           ----

      Pre-tax income                                         29%            28%
                                                           ====           ====
</TABLE>


        Net sales for the quarter ended March 31, 1998 increased 20% compared to
    the same period in 1997. Sales of transmission products increased by 22%
    over the prior year. This increase was partially offset by a 23% decrease in
    teleconferencing product's sales associated with the Company's decision to
    move away from dealer-based distribution channels for its conferencing
    products and pursue an OEM-based strategy. The Company's continuing growth
    in sales and profits is driven by world-wide growth in telecommunications
    infrastructure. With current sales in over 70 countries, the Company
    benefits from this global trend. In the most recent quarter, Asian sales
    were 5% of total sales, while Europe, North America and Latin America were
    56%, 25% and 14% respectively. The European and Latin American regions
    showed the strongest growth on a quarter to quarter comparison.


                                       7
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                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION

        Backlog as of March 31, 1998 was $6.0 million compared to December 31,
    1997 of $4.7 million. Backlog may fluctuate since transmission products
    represent capital purchases for the Company's customers and may be affected
    by the scheduling of large orders by customers. The Company typically fills
    orders for its products within 60 days of the receipt of the purchase order.
    Customers usually purchase products on an as-needed basis, and accordingly,
    the Company generally has less than two months net sales in backlog. Backlog
    consists of purchase orders received by the Company with a schedule of
    deliveries within twelve months of the purchase order date. Written
    commitments without delivery schedules are not considered in calculating
    backlog.

        Gross profit as a percentage of net sales was 62% for the quarter ended
    March 31, 1998, as compared to 66% for the quarter in 1997. Of the 4%
    decline in gross profit, 3% is due to the reallocation of Global Technical
    Services Center ("GTS") expenses from operating expenses to cost of sales.
    This alignment more closely reflects the internal and external support of
    the department. Despite price competition in both new and existing markets,
    the increase in sales volumes and the reduction of product cost has enabled
    the Company to maintain gross profit margins.

        Selling and marketing expenses remained constant in terms of dollars,
    but declined to 16% of net sales for the quarter ended March 31, 1998 as
    compared to 19% for the three month period in 1997. Increases in selling and
    marketing expenses associated with the continued growth in the Company were
    offset by the reallocation of GTS expenses to cost of sales. Product
    development expenses increased for the three months ended March 31, 1998 by
    $546, while increasing as a percentage of net sales to 13% for the quarter
    as compared to 12% for the same quarter ended in 1997. There has been
    continued emphasis on product development and the increase in personnel to
    support the development of new products. General and administrative expense
    remained constant in nominal terms, however, decreasing to 6% of net sales
    for the three months ended March 31, 1998 as compared to 7% for the same
    period during 1997. An increase in the expenses associated with the growth
    of the Company was offset by a decrease in administrative services fees and
    savings in insurance premiums. Income taxes reflect an effective tax rate of
    34% in 1998 as compared to 36% in 1997. The decrease in effective tax rate
    was due in part to tax benefits recorded on export sales during 1998.


    LIQUIDITY AND CAPITAL RESOURCES

        The Company has cash and short term investments totaling $28.6 million.
    The Company continues to generate cash from operations to fund its working
    capital needs and capital expenditures. The Company generated cash and short
    term investments of $2.2 million for three months ended March 31, 1998 as
    compared to an increase of $1.3 million for the three months during the same
    period in 1997. The increase in net income is offset by increases in working
    capital and capital expenditures related to the growth of the business.
    Capital expenditures for the three months ended March 31, 1998 were $1.6
    million. Management anticipates that the Company will continue to expend
    capital in product development, management information systems and
    improvements related to its growth. The Company currently anticipates that
    cash generated from operations, existing cash balances and amounts available
    under an unused, uncommitted $10 million bank line of credit will be
    sufficient to satisfy its operating cash needs through 1998. Should the
    business progress more rapidly than expected, the Company believes that
    additional bank credit would be available to fund operating and capital
    requirements. In addition, the Company could consider additional public or
    private debt or equity financing to fund future growth opportunities.


                                       8
<PAGE>   9
                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION


       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

        In February 1997, the Financial Accounting Standards Board (FASB) issued
    Statement of Financial Accounting Standard No. 128, Earnings Per Share
    (Statement 128). Statement 128 supersedes Accounting Principles Board
    Opinion No. 15, Earnings Per Share (APB 15), and specifies the computation,
    presentation, and disclosure requirements for earnings per share (EPS) for
    entities with publicly held common stock or potential common stock.
    Statement 128 replaces the presentation of primary and fully diluted EPS
    with a presentation of basic and diluted EPS, respectively. Statement 128
    which is effective for financial statements for both interim and annual
    periods ending after December 15, 1997 was adopted in the financial
    statements of the Company for the year ended December 31, 1997. The
    calculation of EPS under APB and Statement 128 for the three months ended
    March 31, 1998 and 1997 was:

<TABLE>
<CAPTION>
                                                APB 15                   Statement 128
                                                ------                   -------------
                                         Primary     Fully Diluted     Basic    Diluted
                                         -------     -------------     -----    -------
                                               (unaudited)               (unaudited)
<S>                                      <C>         <C>               <C>      <C> 
    Three months ended March 31, 1998      $.24           $.24         $.24       $.24

    Three months ended March 31, 1997      $.19           $.19         $.19       $.19
</TABLE>

        Also during 1997, the FASB issued pronouncements relating to the
    presentation and disclosure of information related to the Company's capital
    structure, comprehensive income, segment data, and pension disclosures. The
    Company has adopted the provisions relating to capital structure for the
    year ending December 31, 1997 and for comprehensive income in the first
    quarter 1998. None of these pronouncements has had a material effect on the
    financial statements of the Company. Provisions of the other pronouncements,
    if applicable, are required to be adopted for the year ending December 31,
    1998. The adoption of these pronouncements will not have an impact on the
    Company's financial position and results of operations, but may change the
    presentation of certain of the Company's financial statements and related
    notes and data thereto.

        In October 1997, the Accounting Standards Executive Committee issued
    Statement of Position No. 97-2, "Software Revenue Recognition ("SOP 97-2")
    that supercedes Statement of Position No. 91-1. "Software Revenue
    Recognition". SOP 97-2 is effective for transactions entered into in fiscal
    years beginning after December 15, 1997. Adoption of this statement in 1998
    did not have a significant impact effect on the Company's financial position
    or results of operation.

        Except for the historical information contained herein, this discussion
    contains forward-looking statements regarding the marketability of new
    products and the gaining of new customers. The risks and uncertainties
    associated with the continued acceptance of products, the timely
    availability and pricing of new products, competition, market growth and, as
    well as other risks detailed in the Company's SEC reports could cause actual
    results to differ from those in the forward looking statements.


                                       9
<PAGE>   10
                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION


PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  Exhibit 11 - Computation of net income per share

                  Exhibit 27 - Financial Data Schedule


         (b)      Reports on Form 8-K

                  None






No other applicable items.


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<PAGE>   11
                   COHERENT COMMUNICATIONS SYSTEMS CORPORATION



                                   SIGNATURES




         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                 COHERENT COMMUNICATIONS SYSTEMS
                                 CORPORATION




                                 By: /s/ Melba G. Chan
                                     ------------------------------------------
                                     Melba G. Chan
                                     Vice-President and Chief Financial Officer

    Date: May 15, 1998


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