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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