MELVILLE, N.Y.--(BUSINESS WIRE)-- June 6, 2013 -- Comtech Telecommunications Corp. (NASDAQ: CMTL) today reported its operating results for the three and nine months ended April 30, 2013.

Net sales for the third quarter of fiscal 2013 were $69.9 million compared to $99.8 million for the third quarter of fiscal 2012. The period-over-period decrease in net sales is due to lower net sales in our mobile data communications and RF microwave amplifiers segments and, to a much lesser extent, our telecommunications transmission segment. GAAP net income was $2.9 million, or $0.17 per diluted share, for the third quarter of fiscal 2013 as compared to $6.1 million, or $0.29 per diluted share, for the third quarter of fiscal 2012.

Net sales for the nine months ended April 30, 2013 were $235.4 million compared to $312.3 million for the nine months ended April 30, 2012. GAAP net income was $12.7 million, or $0.69 per diluted share, for the nine months ended April 30, 2013 as compared to $24.5 million, or $1.04 per diluted share, for the nine months ended April 30, 2012.

The Company also announced that it is updating its fiscal 2013 revenue guidance to a range of $310.0 million to $320.0 million and its fiscal 2013 GAAP diluted earnings per share guidance to a range of $0.86 to $0.92. Adjusted EBITDA for fiscal 2013 is expected to be between $49.0 million and $51.0 million. The updated diluted earnings per share guidance reflects the impact of the Company's repurchases of common stock through June 5, 2013.

In commenting on the Company's performance and updated fiscal 2013 guidance, Fred Kornberg, President and Chief Executive Officer, stated, "Despite difficult market conditions, we are pleased with our overall third quarter results, particularly the receipt of several strategically important new contracts. For the first time this fiscal year, our quarterly book-to-bill ratio exceeded 1.0, and we expect the same to be the case in the fourth quarter."

Mr. Kornberg added, "We are excited about our long-term business prospects and we are confident that we are on the right path to achieve revenue and earnings growth in fiscal 2014."

Selected Fiscal 2013 Third Quarter Financial Metrics and Other Items

• Backlog as of April 30, 2013 was $130.1 million compared to $126.4 million as of January 31, 2013.
• Total bookings for the three and nine months ended April 30, 2013 were $73.6 million and $211.5 million, respectively, compared to $110.9 million and $304.7 million for the three and nine months ended April 30, 2012, respectively.
• Adjusted EBITDA was $9.6 million and $38.2 million for the three and nine months ended April 30, 2013, respectively, as compared to $15.4 million and $54.6 million for the three and nine months ended April 30, 2012, respectively. Adjusted EBITDA is a Non-GAAP financial measure and is defined in the below table.
• The Company's effective income tax rate for the three months ended April 30, 2013 was 22.3%, which reflects a discrete tax benefit of approximately $0.5 million. The Company's effective income tax rate for the twelve months ending July 31, 2013 is expected to approximate 35.5%, excluding discrete tax adjustments.
• During the three months ended April 30, 2013, the Company repurchased 542,495 shares of its common stock at an aggregate cost of approximately $13.8 million (including transaction costs).
• At April 30, 2013, the Company had $342.2 million of cash and cash equivalents which does not reflect the subsequent repurchase of an additional 95,888 shares of the Company's common stock for an aggregate cost of approximately $2.5 million (including transaction costs) from May 1, 2013 through June 5, 2013 or the quarterly dividend payment of $4.5 million which was paid on May 21, 2013. Since establishing the Company's first repurchase program on September 23, 2010, the Company has repurchased a total of 12,389,303 shares of common stock for approximately $365.7 million (including transaction costs). The Company can make additional repurchases of up to $34.6 million pursuant to its existing $50.0 million stock repurchase program.
• Additional information about the Company's updated fiscal 2013 guidance is contained in the Company's third quarter investor presentation which is located on the Company's website at www.comtechtel.com.

Conference Call

The Company has scheduled an investor conference call for 8:30 AM (ET) on Friday, June 7, 2013. Investors and the public are invited to access a live webcast of the conference call from the investor relations section of the Comtech web site at www.comtechtel.com. Alternatively, investors can access the conference call by dialing (866) 952-1906 (domestic), or (785) 424-1825 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (800) 283-4593 or (402) 220-0872. In addition, an updated investor presentation, including earnings guidance, is available on the Company's web site.

About Comtech

Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The Company believes many of its solutions play a vital role in providing or enhancing communication capabilities when terrestrial communications infrastructure is unavailable, inefficient or too expensive. The Company conducts business through three complementary segments: telecommunications transmission, RF microwave amplifiers and mobile data communications. The Company sells products to a diverse customer base in the global commercial and government communications markets. The Company believes it is a market leader in the market segments that it serves.

Cautionary Statement Regarding Forward-Looking Statements

Certain information in this press release contains forward-looking statements, including but not limited to, information relating to the Company's future performance and financial condition, plans and objectives of the Company's management and the Company's assumptions regarding such future performance, financial condition, and plans and objectives that involve certain significant known and unknown risks and uncertainties and other factors not under the Company's control which may cause its actual results, future performance and financial condition, and achievement of plans and objectives of the Company's management to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include the nature and timing of receipt of, and the Company's performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; frequent new product announcements and enhancements; changing customer demands; changes in prevailing economic and political conditions; risks associated with the Company's legal proceedings and other matters; risks associated with certain U.S. government investigations; risks associated with the Company's BFT-1 contracts and the post-award audit of its original BFT-1 contract; risks associated with the Company's obligations under its revolving credit facility; and other factors described in the Company's filings with the Securities and Exchange Commission.

COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited)
		Three months ended April 30,							Nine months ended April 30,
		2013				2012			2013			2012
Net sales		$	69,856,000			99,793,000			235,386,000			312,295,000
Cost of sales		38,429,000				58,115,000			129,916,000			177,921,000
Gross profit		31,427,000				41,678,000			105,470,000			134,374,000
Expenses:
Selling, general and administrative		15,374,000				20,005,000			47,617,000			63,749,000
Research and development		9,080,000				9,481,000			28,407,000			28,609,000
Amortization of intangibles		1,582,000				1,626,000			4,746,000			5,037,000
		26,036,000				31,112,000			80,770,000			97,395,000
Operating income		5,391,000				10,566,000			24,700,000			36,979,000
Other expenses (income):
Interest expense		2,009,000				2,192,000			6,150,000			6,521,000
Interest income and other		(287,000		)		(370,000	)		(878,000	)		(1,300,000	)
Income before provision for income taxes		3,669,000				8,744,000			19,428,000			31,758,000
Provision for income taxes		817,000				2,678,000			6,776,000			7,270,000
Net income		$	2,852,000			6,066,000			12,652,000			24,488,000
Net income per share:
Basic		$	0.17			0.32			0.74			1.18
Diluted		$	0.17			0.29			0.69			1.04
Weighted average number of common shares outstanding — basic		16,731,000				18,853,000			17,141,000			20,746,000
Weighted average number of common and common equivalent shares outstanding — diluted		16,827,000				24,910,000			23,221,000			26,724,000
Dividends declared per issued and outstanding common share as of the applicable dividend record date		$	0.275			0.275			0.825			0.825

COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheets
		April 30, 2013				July 31, 2012
Assets		(Unaudited)				(Audited)
Current assets:
Cash and cash equivalents		$	342,197,000			367,894,000
Accounts receivable, net		47,904,000				56,242,000
Inventories, net		71,101,000				72,361,000
Prepaid expenses and other current assets		10,737,000				8,196,000
Deferred tax asset, net		9,780,000				12,183,000
Total current assets		481,719,000				516,876,000
Property, plant and equipment, net		20,858,000				22,832,000
Goodwill		137,354,000				137,354,000
Intangibles with finite lives, net		34,087,000				38,833,000
Deferred tax asset, net, non-current		-				438,000
Deferred financing costs, net		1,450,000				2,487,000
Other assets, net		894,000				958,000
Total assets		$	676,362,000			719,778,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	12,149,000			20,967,000
Accrued expenses and other current liabilities		30,641,000				40,870,000
Dividends payable		4,544,000				4,773,000
Customer advances and deposits		13,432,000				14,516,000
Interest payable		3,029,000				1,529,000
Total current liabilities		63,795,000				82,655,000
Convertible senior notes		200,000,000				200,000,000
Other liabilities		3,883,000				5,098,000
Income taxes payable		3,266,000				2,624,000
Deferred tax liability, net		1,184,000				-
Total liabilities		272,128,000				290,377,000
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000		-				-
Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 28,996,237 shares and 28,931,679 shares at April 30, 2013 and July 31, 2012, respectively		2,900,000				2,893,000
Additional paid-in capital		361,970,000				361,458,000
Retained earnings		402,773,000				404,227,000
		767,643,000				768,578,000
Less:
Treasury stock, at cost (12,504,352 shares and 11,564,059 shares at April 30, 2013 and July 31, 2012, respectively)		(363,409,000		)		(339,177,000	)
Total stockholders' equity		404,234,000				429,401,000
Total liabilities and stockholders' equity		$	676,362,000			719,778,000

COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited)
		Three Months Ended April 30,							Nine Months Ended April 30,
		2013				2012			2013			2012
Reconciliation of GAAP Net Income to Adjusted EBITDA(1):
GAAP net income		$	2,852,000			6,066,000			12,652,000			24,488,000
Income taxes		817,000				2,678,000			6,776,000			7,270,000
Net interest expense and other		1,722,000				1,822,000			5,272,000			5,221,000
Amortization of stock-based compensation		694,000				809,000			2,245,000			2,718,000
Depreciation and other amortization		3,522,000				4,064,000			10,705,000			12,256,000
Restructuring charges related to the wind-down of microsatellite product line		-				-			569,000			-
Costs related to withdrawn fiscal 2011 contested proxy solicitation		-				-			-			2,638,000
Adjusted EBITDA		$	9,607,000			15,439,000			38,219,000			54,591,000

(1)

Represents earnings before interest, income taxes, depreciation and amortization of intangibles and stock-based compensation, restructuring charges related to the wind-down of the microsatellite product line of the Company's mobile data communications segment and costs related to a withdrawn fiscal 2011 contested proxy solicitation. Adjusted EBITDA is a non-GAAP operating metric used by management in assessing the Company's operating results. The Company's definition of Adjusted EBITDA may differ from the definition of EBITDA used by other companies and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is also a measure frequently requested by the Company's investors and analysts. The Company believes that investors and analysts may use Adjusted EBITDA, along with other information contained in its SEC filings, in assessing its ability to generate cash flow and service debt.

ECMTL

Media:
Michael D. Porcelain, Senior Vice President and Chief Financial Officer
631-962-7000
Info@comtechtel.com

Source: Comtech Telecommunications Corp.

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