Comtech Telecommunications Corp. Announces Record Results for the First Quarter of Fiscal 2004
Comtech Telecommunications Corp. Announces Record Results for the First Quarter of Fiscal 2004
MELVILLE, N.Y., Dec 8, 2003 (BUSINESS WIRE) -- Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported its results for the three months ended October 31, 2003. Net sales for the three months ended October 31, 2003 were $56.3 million compared to $31.3 million for the three months ended October 31, 2002.
Net income was $5.7 million, or $0.37 cents per diluted share, and $0.8 million, or $0.07 cents per diluted share, for the three month periods ended October 31, 2003 and 2002, respectively. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $9.9 million and $3.3 million for the three months ended October 31, 2003 and 2002, respectively.
Backlog as of October 31, 2003 was $99.0 million compared to $85.5 million last year and $100.1 million as of July 31, 2003.
In commenting on the Company's performance during the first quarter of fiscal 2004, Fred Kornberg, President and Chief Executive Officer, noted, "The first quarter of fiscal 2004 was yet another record one for our company. Sales, net income, earnings per share and EBITDA surpassed previous records set in fiscal 2003."
Mr. Kornberg added, "Strong sales of over-the-horizon microwave and satellite earth station products in our telecommunications transmission segment, as well as a substantial increase in sales in our mobile data communications segment, resulted in an 80% increase in revenues from the first quarter of fiscal 2003 to the first quarter of fiscal 2004."
Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The Company conducts its business through three complementary segments: telecommunications transmission, RF microwave amplifiers, and mobile data communications. The Company offers niche products, systems and services where it believes it has technological, engineering, systems design or other expertise that differentiate its product offerings.
The Company has scheduled an investor conference call for 11:30 AM (ET) on Tuesday, December 9, 2003. Investors and the public are invited to access a live webcast of the conference call from the news section of the Comtech web site, www.comtechtel.com. A replay of the webcast will be available at the same location for 30 days following the conference call. Alternatively, investors can access the conference call by dialing (800) 227-9428 (domestic), or (785) 832-1508 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (402) 220-0668. In addition, an updated investor presentation, including updated earnings guidance, will be available on our web site shortly after the conference call.
Certain information in this press release contains forward-looking statements, including but not limited to, information relating to the future performance and financial condition of the Company, the plans and objectives of the Company's management and the Company's assumptions regarding such performance and plans that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. The Company's Securities and Exchange Commission filings identify many such risks and uncertainties, which include the following:
-- Our operating results being difficult to forecast and subject
to volatility;
-- Our inability to maintain our government business;
-- Our inability to keep pace with technological changes;
-- Our dependence on international sales;
-- The impact of a continued domestic and foreign economic
slow-down and reduction in telecommunications equipment and
systems spending on the demand for our products, systems and
services;
-- Our mobile data communications business being in an early
stage;
-- Our backlog being subject to cancellation or modification;
-- Our dependence on component availability, subcontractor
availability and performance by key suppliers;
-- Our fixed price contracts being subject to risk;
-- The impact of adverse regulatory changes on our ability to
sell products, systems and services;
-- The impact of prevailing economic and political conditions on
our businesses;
-- Whether we can successfully integrate and assimilate the
operations of acquired businesses;
-- The impact of the loss of key technical or management
personnel;
-- The highly competitive nature of our markets;
-- Our inability to protect our proprietary technology;
-- Our operations being subject to environmental regulation;
-- The impact of recently enacted and proposed changes in
securities laws and regulations on our costs; and
-- The impact of terrorist attacks and threats, and government
responses thereto, and threats of war on our businesses.
COMTECH TELECOMMUNICATIONS CORP.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
October 31,
-----------------------
2003 2002
----- -----
Net sales $ 56,296,000 31,273,000
Cost of sales 35,316,000 19,596,000
--------------- -----------
Gross profit 20,980,000 11,677,000
--------------- -----------
Expenses:
Selling, general and administrative 8,574,000 6,328,000
Research and development 3,541,000 3,016,000
Amortization of intangibles 500,000 526,000
--------------- -----------
12,615,000 9,870,000
--------------- -----------
Operating income 8,365,000 1,807,000
Other expense (income):
Interest expense 24,000 691,000
Interest income (105,000) (59,000)
--------------- -----------
Income before provision for income taxes 8,446,000 1,175,000
Provision for income taxes 2,703,000 376,000
--------------- -----------
Net income $ 5,743,000 799,000
=============== ===========
Net income per share:
Basic $ 0.41 0.07
=============== ==========
Diluted $ 0.37 0.07
=============== ==========
Weighted average number of common shares
outstanding - basic computation 13,953,000 11,265,000
Potential dilutive common shares 1,407,000 395,000
--------------- -----------
Weighted average number of common and common
equivalent shares outstanding assuming
dilution - diluted computation 15,360,000 11,660,000
=============== ===========
EBITDA (1) $ 9,927,000 3,346,000
=============== ===========
Reconciliation of net income to EBITDA:
Net income $ 5,743,000 799,000
Income taxes 2,703,000 376,000
Net interest expense (income) (81,000) 632,000
Depreciation and amortization 1,562,000 1,539,000
--------------- -----------
EBITDA $ 9,927,000 3,346,000
================ ==========
(1) Represents earnings before interest, income taxes, depreciation
and amortization. EBITDA is a non-GAAP operating metric used by
management in assessing the Company's operating results and ability to
meet debt service requirements. EBITDA is also a measure frequently
requested by the Company's investors and analysts. The Company
believes that investors and analysts may use EBITDA, along with other
information contained in its SEC filings, in assessing its ability to
generate cash flow and service debt.
COMTECH TELECOMMUNICATIONS CORP.
Consolidated Balance Sheets
October 31, July 31,
2003 2003
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 49,604,000 48,617,000
Restricted cash 4,280,000 4,288,000
Accounts receivable, less allowance for
doubtful accounts of $714,000 at
October 31, 2003 and $912,000 at
July 31, 2003 34,336,000 26,696,000
Inventories, net 33,517,000 34,048,000
Prepaid expenses and other current assets 2,198,000 1,742,000
Deferred tax asset - current 5,699,000 5,699,000
-------------- ------------
Total current assets 129,634,000 121,090,000
Property, plant and equipment, net 12,502,000 12,328,000
Goodwill and other intangibles with
indefinite lives, net 17,726,000 17,726,000
Intangibles with definite lives, net 10,853,000 11,353,000
Other assets, net 378,000 390,000
Deferred tax asset - non-current 1,363,000 1,363,000
-------------- ------------
Total assets $ 172,456,000 164,250,000
============== ============
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of capital
lease obligations $ 706,000 899,000
Accounts payable 13,296,000 11,527,000
Accrued expenses and other
current liabilities 12,497,000 13,267,000
Customer advances and deposits 2,516,000 2,491,000
Deferred service revenue 11,279,000 11,160,000
Income taxes payable 7,614,000 6,945,000
-------------- ------------
Total current liabilities 47,908,000 46,289,000
Capital lease obligations,
less current installments 320,000 393,000
----------- ------------
Total liabilities 48,228,000 46,682,000
Stockholders' equity:
Preferred stock, par value $.10 per share;
shares authorized and unissued 2,000,000 - -
Common stock, par value $.10 per share;
authorized 30,000,000 shares, issued
14,194,233 shares at October 31, 2003 and
14,020,769 shares at July 31, 2003 1,419,000 1,402,000
Additional paid-in capital 108,468,000 107,573,000
Retained earnings 14,627,000 8,884,000
-------------- ------------
124,514,000 117,859,000
Less:
Treasury stock (140,625 shares) (185,000) (185,000)
Deferred compensation (101,000) (106,000)
-------------- ------------
Total stockholders' equity 124,228,000 117,568,000
-------------- ------------
Total liabilities and
stockholders' equity $ 172,456,000 164,250,000
============== ============
Commitments and contingencies
ECMTL
SOURCE: Comtech Telecommunications Corp.
Comtech Telecommunications Corp.
Fred Kornberg or Robert G. Rouse, 631-777-8900
Info@comtechtel.com
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