MELVILLE, N.Y., Jun 8, 2004 (BUSINESS WIRE) -- Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported its results for the three months ended April 30, 2004.

Net sales for the three months ended April 30, 2004 were $51.2 million compared to $48.8 million for the three months ended April 30, 2003. Net income was $4.8 million, or 31 cents per diluted share, and $3.5 million, or 29 cents per diluted share, for the three months ended April 30, 2004 and 2003, respectively. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased to $9.0 million for the three months ended April 30, 2004 from $7.2 million for the three months ended April 30, 2003.

Net sales for the nine months ended April 30, 2004 were $164.3 million compared to $122.4 million for the nine months ended April 30, 2003. Net income was $15.7 million, or $1.02 per diluted share, and $6.1 million, or 52 cents per diluted share, for the nine months ended April 30, 2004 and 2003, respectively. EBITDA increased to $28.1 million for the nine months ended April 30, 2004 from $15.5 million for the nine months ended April 30, 2003.

Sales and earnings for the fiscal 2004 periods were favorably impacted by margin adjustments of approximately $1.1 million, net of income taxes, due to lower than anticipated costs on two large contracts as they draw nearer to completion.

Backlog as of April 30, 2004 was $90.9 million compared to $115.9 million as of April 30, 2003 and $97.1 million as of January 31, 2004. The decrease is the result of our performance on two large contracts received in fiscal 2003.

In commenting on the Company's performance during the third quarter of fiscal 2004, Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., said, "The third quarter of fiscal 2004 was another strong showing for Comtech. As predicted, fiscal 2004 is expected to be another record year based on virtually every operating metric: sales, operating income, EBITDA, net income and EPS."

Mr. Kornberg added, "More importantly, we are optimistic across all three of our business segments as we approach fiscal 2005. Despite expected EPS growth in fiscal 2004 of more than 60%, we believe fiscal 2005 will be another record year in sales and earnings."

Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions addressing commercial and government markets. The Company conducts its business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers. The Company offers specialized 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, June 8, 2004. 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) 540-0559 (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) 220-0857. In addition, an updated investor presentation, including 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;

    --  The impact of terrorist attacks and threats, and government
        responses thereto, and threats of war on our businesses; and

    --  Our inability to satisfy our debt obligations, including the
        recently issued convertible senior notes.

                   COMTECH TELECOMMUNICATIONS CORP.
                 Consolidated Statements of Operations
                              (Unaudited)


                        Three Months Ended        Nine Months Ended
                            April 30,                 April 30,
                  ----------------------------------------------------
                         2004         2003        2004          2003
                  ----------------------------------------------------

Net sales          $51,244,000   48,753,000  164,334,000  122,352,000
Cost of sales       30,635,000   32,262,000  102,132,000   80,641,000
                  ----------------------------------------------------
     Gross profit   20,609,000   16,491,000   62,202,000   41,711,000
                  ----------------------------------------------------

Expenses:
     Selling,
      general and
      administrative 8,775,000    7,270,000   26,153,000   19,970,000
     Research and
      development    3,993,000    3,014,000   11,198,000    9,326,000
     Amortization of
      intangibles      499,000      488,000    1,498,000    1,540,000
                  ----------------------------------------------------
                    13,267,000   10,772,000   38,849,000   30,836,000
                  ----------------------------------------------------

Operating income     7,342,000    5,719,000   23,353,000   10,875,000
Other expense
 (income):
     Interest
      expense          675,000      682,000      750,000    2,059,000
     Interest income  (324,000)     (66,000)    (543,000)    (187,000)
                  ----------------------------------------------------

Income before
 provision for
 income taxes        6,991,000    5,103,000   23,146,000    9,003,000
Provision for income
 taxes               2,238,000    1,633,000    7,407,000    2,881,000
                  ----------------------------------------------------

Net income          $4,753,000    3,470,000   15,739,000    6,122,000
                  ====================================================

Net income per
 share:
     Basic               $0.33         0.31         1.12         0.54
                  ====================================================
     Diluted             $0.31         0.29         1.02         0.52
                  ====================================================

Weighted average
 number of common
 shares
 outstanding -
 basic              14,217,000   11,351,000   14,083,000   11,307,000
Potential dilutive
 common shares       1,187,000      711,000    1,354,000      563,000
                  ----------------------------------------------------
Weighted average
 number of common
 and common
 equivalent
 shares
 outstanding
 assuming
 dilution -
 diluted            15,404,000   12,062,000   15,437,000   11,870,000
                  ====================================================

EBITDA  (1)         $8,956,000    7,228,000   28,091,000   15,492,000
                  ====================================================

Reconciliation of net
 income to EBITDA:
     Net income     $4,753,000    3,470,000   15,739,000    6,122,000
     Income taxes    2,238,000    1,633,000    7,407,000    2,881,000
     Net interest
      expense          351,000      616,000      207,000    1,872,000
     Depreciation and
      amortization   1,614,000    1,509,000    4,738,000    4,617,000
                   --------------------------------------------------
     EBITDA         $8,956,000    7,228,000   28,091,000   15,492,000
                   ==================================================

(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 its 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

                                                 April 30,    July 31,
                                                   2004         2003
                                             -------------------------
                   Assets                            (Unaudited)
Current assets:
   Cash and cash equivalents                 $152,818,000  48,617,000
   Restricted cash                              4,196,000   4,288,000
   Accounts receivable, net                    48,565,000  26,696,000
   Inventories, net                            36,626,000  34,048,000
   Prepaid expenses and other current assets    2,155,000   1,742,000
   Deferred tax asset - current                 5,699,000   5,699,000
                                             -------------------------
                   Total current assets       250,059,000 121,090,000

Property, plant and equipment, net             13,351,000  12,328,000
Goodwill and other intangibles with indefinite
 lives                                         17,726,000  17,726,000
Intangibles with definite lives, net            9,855,000  11,353,000
Deferred financing costs, net                   3,677,000       -
Other assets                                      370,000     390,000
Deferred tax asset - non-current                1,363,000   1,363,000
                                             -------------------------
                   Total assets              $296,401,000 164,250,000
                                             =========================

                   Liabilities and Stockholders' Equity

Current liabilities:
   Current installments of capital lease
    obligations                                  $343,000     899,000
   Accounts payable                            11,154,000  11,527,000
   Accrued expenses and other current
    liabilities                                17,301,000  13,267,000
   Customer advances and deposits               5,855,000   2,491,000
   Deferred service revenue                    13,439,000  11,160,000
   Interest payable                               554,000        -
   Income taxes payable                         6,414,000   6,945,000
                                             -------------------------

                   Total current liabilities   55,060,000  46,289,000

Convertible senior notes                      105,000,000        -
Capital lease obligations, less current
 installments                                     194,000     393,000
                                             -------------------------
                   Total liabilities          160,254,000  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
     14,363,570 shares at April 30, 2004 and
     14,020,769 shares at July 31, 2003         1,436,000   1,402,000
    Additional paid-in capital                110,321,000 107,573,000
    Retained earnings                          24,623,000   8,884,000
                                             -------------------------
                                              136,380,000 117,859,000
    Less:
          Treasury stock (140,625 shares)       (185,000)   (185,000)
          Deferred compensation                  (48,000)   (106,000)
                                             -------------------------
          Total stockholders' equity          136,147,000 117,568,000
                                             -------------------------
Total liabilities and stockholders' equity   $296,401,000 164,250,000
                                             ========================
Commitments and contingencies

ECMTL

SOURCE: Comtech Telecommunications Corp.

Comtech Telecommunications Corp.
Media Contacts:
Fred Kornberg, 631-777-8900
or
Robert G. Rouse, 631-777-8900
Info@comtechtel.com

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