<PAGE>   1
                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
(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, 1997

                                       or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

     For the transition period from          to
                                    --------     -----------

                        Commission File Number:   016441

                                CODE-ALARM, INC.
                                ----------------
             (Exact name of registrant as specified in its charter)

                                    MICHIGAN
                                    --------
                        (State or other jurisdiction of
                         incorporation or Organization)


                                   38-2334698
                                   ----------
                               (I.R.S. Employer
                             Identification No.)

        950 EAST WHITCOMB, MADISON HEIGHTS, MICHIGAN              48071
        ------------------------------------------------------------------
           (Address of principal executive offices)             (Zip Code)

(Registrant's telephone number, including area code):  810-583-9620
                                                       ------------

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

     Yes   X     No
         -----      -----

The number of shares outstanding of the registrant's common stock, without par
value, as of May 14, 1997 is  2,320,861.


<PAGE>   2
                                     INDEX



<TABLE>
<CAPTION>
                                                                               Page No.
                                                                               --------
<S>                                                                              <C>                              
Part I. - Financial Information                                                   3

                  Consolidated Condensed Balance Sheets -
                    As of March 31, 1997 (Unaudited) and December 31, 1996        3

                  Consolidated Condensed Statements of Operations (Unaudited) -
                    First Quarter Ended March 31, 1997 and March 31, 1996         4 

                  Consolidated Condensed Statements of Cash Flows (Unaudited) -
                    First Quarter Ended March 31, 1997 and March 31, 1996         5

                  Notes to Consolidated Condensed Financial Statements            6

                  Management's Discussion and Analysis of Financial               7
                    Condition and Results of Operations



Part II.          -  Other Information                                            9
</TABLE>



                                                                               2


<PAGE>   3


                         PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS.

                                CODE-ALARM, INC.
                     CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                              March 31,    December 31,
                                                                 1997        1996
ASSETS                                                        (Unaudited)
------                                                       ------------ ------------                              
<S>                                                           <C>         <C>
Cash and cash equivalents                                     $    165    $      45
Accounts receivable (less allowance for
 doubtful accounts of $992,000 in 1997
 $950,000 in 1996)                                               9,104        8,798
Inventories                                                      8,496        8,734
Refundable income taxes                                          1,059        1,059
Deferred income taxes                                            2,040        2,040
Other                                                              519          729
                                                              --------    ---------                          
    Total current assets                                        21,383       21,405

Property and equipment, net of accumulated depreciation          3,545        3,750
Excess of cost over net assets acquired, net                     1,508        1,910
Other intangibles, net                                             500          651
Other assets                                                     1,561        1,711
                                                              --------    ---------

    Total assets                                              $ 28,497    $  29,427
                                                              ========    =========


LIABILITIES & SHAREHOLDERS' EQUITY
----------------------------------

Current portion of long-term debt                             $  8,786    $   9,308
Accounts payable                                                 9,035        9,874
Accrued expenses                                                 2,692        2,358
Income tax payable                                                  13           22
Reserve for litigation                                           5,943        5,934
                                                              --------     --------    
    Total current liabilities                                   26,469       27,496

Long-term debt                                                     781          879
                                                              --------     --------              
    Total liabilities                                           27,250       28,375

Shareholders' equity:
  Common stock                                                  12,213       12,213
  Foreign currency translation adjustment                         (178)        (260)
  (Accumulated deficit)                                        (10,788)     (10,901)
                                                              --------     --------         
    Total shareholders' equity                                   1,247        1,052
                                                              --------     --------          

    Total liabilities and shareholders' equity                $ 28,497     $ 29,427
                                                              ========     ========         
</TABLE>



See accompanying notes to consolidated condensed financial statements.



                                                                               3


<PAGE>   4
                                CODE-ALARM, INC.
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                    First Quarter Ended March 31
                                                        1997            1996
                                                      --------       --------
<S>                                                   <C>            <C>
Net sales                                             $ 15,775       $ 16,596
Cost of  sales                                           9,743         10,674
                                                      --------       --------                     

Gross profit                                             6,032          5,922

Operating expenses:
  Sales and marketing                                    2,244          2,598
  Engineering                                              426            762
  General and administrative                             2,532          2,037
  Impairment of goodwill                                   373         
                                                      --------       --------                       
                                                         5,575          5,397
                                                      --------       --------                       

Income from operations                                     457            525

Other expense:
  Interest                                                 336            418 
  Other                                                      8              2 
                                                      --------       --------                       


Income before income taxes                                 113            105

Income taxes                                                               56
                                                      --------       --------                       

Net income                                            $    113       $     49
                                                      ========       ========                      

Net income per common share                           $  0. 05       $   0.02
                                                      ========       ========                        

Weighted average number of common shares outstanding     2,321          2,320
                                                      ========       ======== 
</TABLE>




See accompanying notes to consolidated condensed financial statements.




                                                                               4

<PAGE>   5
                                CODE-ALARM, INC.
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                    First Quarter Ended March 31
                                                        1997          1996      
                                                        ----          ----      
 <S>                                                  <C>            <C>        
Cash flows from operating activities                  $  845         $ (440)    
                                                                                
Cash flows from investing activities:                                           
     Capital expenditures                               (105)           (87)    
     Payment for intangible assets                                      (33)    
                                                                                
                                                                                
Cash flows from financing activities:                                           
    Net repayments of long-term debt                    (440)          (521)    
    Net (repayment) borrowings on credit facility       (180)           676     
                                                      ------         ------     
Net change in cash and cash equivalents                  120           (405)    
                                                                                
Cash and cash equivalents, beginning of period            45            416     
                                                      ------         ------     
                                                                                
Cash and cash equivalents, end of period              $  165         $   11     
                                                      ======         ======     
                                                                                
                                                                                
                                                                                
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                               
                                                                                
 Cash paid during the quarter for:                                              
     Interest                                         $   76         $  121     
                                                      ======         ======     
     Income taxes                                     $   25         $    0     
                                                      ======         ======     
</TABLE>                                                                        




See accompanying notes to consolidated condensed financial statements.

                                                                               5


<PAGE>   6

                                CODE-ALARM, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1)  The consolidated condensed interim financial statements reflect all
    adjustments which in the opinion of management are necessary to fairly state
    results for the interim periods presented.  All adjustments are of a normal
    and recurring nature, except for the impairment of goodwill in the first
    quarter of 1997.  Results of operations for the interim periods
    presented are not necessarily indicative of results to be expected for the
    fiscal year.

2)  The financial statements include the accounts of the Company and its
    wholly-owned subsidiaries.  All significant intercompany accounts and
    transactions have been eliminated.

3)  Inventories consist of the following:

<TABLE>
<CAPTION>
                                           March 31,   December 31,
                                             1997          1996
                                          (Unaudited)
                                          -----------  ------------
<S>                                        <C>          <C>
                       Raw materials       $   5,925    $ 5,811
                       Work in process           327        324
                       Finished goods          2,244      2,599
                                           ---------    -------
                                           $   8,496    $ 8,734
                                           =========    =======    
</TABLE>


4)  On April 30, 1997 the Company's French subsidiary, European Automotive
    Equipment, filed a voluntary reorganization proceeding and is continuing its
    operations as debtor in possession under the supervision of the Commercial
    Court of Bobigny, France.








                                                                               6


<PAGE>   7

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


Results of Operations

     The Company's consolidated net sales decreased $821,000, or 4.9%, to
$15.8 million for the quarter ended March 31, 1997, as compared to $16.6
million for the quarter ended March 31, 1996.  The decline was due to the 
Company's subsidiary operation in France, as the weakness in this market
continued. North American sales were up slightly during the current quarter to
$13.3 million, as original equipment manufacturers ("OEM") sales increased 6.7%
and direct sales to international dealers increased almost 12%.  Domestic
retail aftermarket and automotive expediter sales were down. 

     For the quarter ended March 31, 1997, consolidated gross profit percent
increased to 38.2% as compared to 35.7% for the comparable quarter ended March
31, 1996, as North American margins continued to improve due to cost reductions
and productivity improvements.

     Consolidated operating expenses for the quarter ended March 31, 1997,
increased $178,000, or 3.3%, to $5.6 million as compared to $5.4 million for the
quarter ended March 31, 1996.  The increase in consolidated operating expenses
was due primarily to the writedown of intangible assets and adjustments to the
carrying value of other assets in Europe totaling $458,000.  The Company
continues to incur significant legal and other professional fees in asserting
its patent rights and as defendant in patent infringement suits.

     As a result of the foregoing, the Company's consolidated income from
continuing operations for the quarter ended March 31, 1997, was $457,000, a
decrease from last year's first quarter results of $525,000.  This decrease was
due to increased losses in Europe of $441,000, and totaled $1,000,000 for
the current quarter.  However, North American operating income increased to $1.5
million.

     Interest expense was down 20% in the first quarter of 1997 from the
first quarter of 1996, to $336,000, as the Company continues to apply excess
cash flow from operating activities to reduce bank borrowings and other long-
term debt.

     The current quarter's tax expense provided for operations was offset by
deferred tax benefits generated through prior year net operating losses.

     As a result of the foregoing, the Company recorded net income for the
quarter ended March 31, 1997, of $113,000, or $.05 per share, compared to net
income of $49,000, or $.02 per share, for the quarter ended March 31, 1996.

     On April 30, 1997, the Company's French subsidiary, European Automotive
Equipment, filed a voluntary reorganization proceeding and is continuing its
operations as debtor in possession under the supervision of the Commercial
Court of Bobigny, France


Liquidity and Capital Resources

     The Company's consolidated working capital at March 31, 1997, was a deficit
of ($5.1) million as compared to a deficit of ($6.1) million at December 31,
1996.  The current ratio (current assets divided by current liabilities) as of
March 31, 1997, is .81 to 1, compared to .78 to 1 at December 31, 1996.

     Net cash provided by operating activities for the quarter ended March 31,
1997, was $845,000 which was used to finance capital expenditures of $105,000
and repayment of bank borrowings and other long-term debt of $620,000.

     At December 31, 1996, the Company was not in compliance with certain
of its bank credit facility covenants.  The Company is continuing its discussion
with the Bank concerning these loan covenant violations, which continue to exist
and which have not been cured.  As of May 12, 1997, the Bank had not agreed to
amend the loan agreement in a manner which would place the Company in compliance
with all covenants of the agreement currently and as of March 31, 1997.  As a
result, all outstanding borrowings due the Bank at March 31, 1997, have been
classified as a current liability.   If the Company is not successful in its
efforts to secure an amended credit agreement, or if the Company is unable to
obtain alternative financing, the Company's ability to continue operations at
its planned level may be impaired.  
 
                                                                            7


<PAGE>   8


     As of May 8, 1997, $11.0 million of the $14.25 million revolving credit
facility was borrowed and outstanding.












                                                                               8


<PAGE>   9

                                    PART II
                               OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS.

     Code-Alarm, Inc. v. Electromotive Technology Corporation.  Case No.
87-CV-74022-DT.  In November of 1987, the Company filed a declaratory judgment
action against Electromotive Technology Corporation ("ETC") in the United States
District Court for the Eastern District of Michigan, Southern Division seeking a
declaration that ETC's U.S. Patent No. 4,585,569 (the "'569 Patent"), describing
and claiming a shock or motion sensor system, was invalid or not infringed by
the Company.  Subsequently, Directed Electronics ("Directed"), of Vista,
California, acquired an interest in the '569 Patent and was made a party to the
lawsuit.  A judgment was entered against the Company on June 16, 1995 in the
Court of Appeals for the Federal Circuit and the Company posted a letter of 
credit as security for an appeal bond in the amount of approximately $5.9 
million, representing the amount of the judgment, including interest.  On April
8, 1997 the Court granted the Company's motion to pay the bond proceeds and 
accrued interest to Plaintiffs, in full satisfaction of the  judgment, without 
prejudice to the Company's right to proceed to set aside the judgment on 
appeal.  The judgment was satisfied on April 18, 1997.

     In the same proceeding Directed is asserting patent infringement claims
against two subsequent shock sensor designs.  The Court has tentatively held
that these two subsequent designs infringe the ETC patent.  The Court has
preliminarily enjoined the manufacture, use, sale, offering for sale and
importing of these two subsequent designs and has scheduled a trial for June
30, 1997 on the issues of willfulness and damages.

     Aureo Rivera Davila and Aureo E. Rivera v. Magna Holding Company et al.,
Case No. 97C 1909, filed March 20, 1997 in the U.S. District Court, Northern
District of Illinois, Eastern Division.  Plaintiffs seek enforcement against the
Company of a $19.4 million default judgment entered by the Court on July 26,
1990 against Chapman Industries Corp. ("Industries") for alleged patent
infringement. With accumulated interest, the amount of the default judgment is
now approximately $30 million.  A subsidiary of the Company purchased certain
assets from LaSalle National Bank ("LaSalle") on January 19, 1990 in a private
sale conducted by LaSalle under Section 9-504 of the Illinois Uniform Commercial
Code to dispose of collateral securing a defaulted loan made by LaSalle to
Chapman Products, Inc. ("Products").  Plaintiffs allege that the assets were
acquired by Products from Industries.  Plaintiffs claim that the sale of the
assets to the subsidiary of the Company was a fraudulent conveyance and that the
Company is a successor in interest to the liability of Industries for the
default judgment. The Company has tendered the defense of this action to LaSalle
pursuant to the indemnification terms contained in its purchase agreement with
LaSalle. Although LaSalle has not yet responded to the Company's tender of the
defense, LaSalle assumed the Company's defense in a similar action by plaintiffs
to enforce the default judgment against the Company in Puerto Rico. The Puerto
Rican action was dismissed on March 20, 1996.


ITEM 5.      OTHER INFORMATION

     The Company's common stock was removed from The Nasdaq Stock Market
effective the opening of business on Thursday, April 24, 1997, as a result of
the Company's deficiency in meeting the minimum net tangible assets requirement
for continued inclusion on The Nasdaq Stock Market.



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.

        (a)     The documents filed as a part of this report:
 
       (3.1)    Restated Articles of Incorporation of the Company, incorporated
                by reference to Exhibit 3.1 to the Company's Registration 
                Statement on Form S-18, as amended, Registration No. 33-16991C 
                ("Form S-18"). 

       (3.2)    Bylaws of the Company, as amended, incorporated by reference to
                Exhibit 3.2 to the Company's Form 10-K for the year ended 
                December 31, 1990 ("1990 Form 10-K").
                                                                                
       (11)     Shares issuable under employee stock options were excluded from 
                the computation of weighted average number of shares 
                outstanding since such shares were either anti-dilutive or 
                their dilutive effect was not material.

       (27)     Financial Data Schedules.

        (b)     There were no reports on Form 8-K filed during the quarter ended
                March 31, 1997.






                                                                               9


<PAGE>   10
                                   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.



                                        CODE-ALARM, INC
                                        ------------------------------
                                          (Registrant)



Date:      May 14, 1997                 /S/     Rand W. Mueller
           ------------                 ------------------------------
                                        Rand W. Mueller
                                        President


Date:      May 14, 1997                 /S/   Craig S. Camalo
           ------------                 ------------------------------
                                        Craig S. Camalo
                                        Vice President of Finance
                                        (Chief Financial Officer)
                                        (Principal Accounting Officer)




                                                                              10


<PAGE>   11





                                 EXHIBIT INDEX


                                                                            
Exhibit                                                                   
Number          Description                                               Page
-------         -----------                                               ----  
[S]             [C]                                                       [C]
 3.1            Restated Articles of Incorporation of the Company, 
                incorporated by reference to Exhibit 3.1 to the 
                Company's Registration Statement on Form S-18, 
                as amended, Registration No. 33-16991C ("Form S-18").

 3.2            Bylaws of the Company, as amended, incorporated by 
                reference to Exhibit 3.2 to the Company's Form 10-K 
                for the year ended December 31, 1990 ("1990 Form 10-K").


  27 *          Financial Data Schedule


* attached as an Exhibit hereto.


                                                               SEQUENTIALLY
EXHIBIT                                                          NUMBERED
NUMBER                            DESCRIPTION                      PAGE
-------                           -----------                  ------------

  27 --                     Financial Data Schedule