MELVILLE, N.Y., June 4, 2008 (PRIME NEWSWIRE) -- Comtech Telecommunications Corp. (Nasdaq:CMTL) today reported its operating results for the three months ended April 30, 2008. Net sales for the third quarter of fiscal 2008 were $138.1 million compared to $119.4 million in the third quarter of fiscal 2007, reflecting significant growth in the mobile data communications and RF microwave amplifiers segments, partially offset by lower net sales in the telecommunications transmission segment.
GAAP net income was $19.3 million, or $0.70 per diluted share, for the three months ended April 30, 2008 compared to $19.1 million, or $0.71 per diluted share, for the three months ended April 30, 2007. Non-GAAP net income, which excludes the amortization of stock-based compensation expense, was $21.0 million, or $0.76 per diluted share, for the three months ended April 30, 2008 as compared to Non-GAAP net income of $20.5 million, or $0.75 per diluted share, for the three months ended April 30, 2007.
Net sales for the nine months ended April 30, 2008 were $405.2 million compared to $327.9 million for the nine months ended April 30, 2007. GAAP net income was $59.5 million, or $2.15 per diluted share, for the nine months ended April 30, 2008 compared to $48.1 million, or $1.80 per diluted share, for the nine months ended April 30, 2007. Non-GAAP net income, which excludes the amortization of stock-based compensation expense, was $64.6 million, or $2.31 per diluted share, for the nine months ended April 30, 2008 as compared to Non-GAAP net income of $51.8 million, or $1.90 per diluted share, for the nine months ended April 30, 2007.
In commenting on the Company's performance during the third quarter of fiscal 2008, Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., said, "The third quarter marks another strong quarter of performance for Comtech. We are marching towards our sixth year in a row of record revenues and profits."
Mr. Kornberg added, "Our growth continues to be driven by our commitment to investing in technologies that make our products more compelling to our customers. We are excited about the many large growth opportunities we see as we look to further growth in fiscal 2009 and beyond."
Selected Third Quarter Fiscal 2008 and 2007 Financial Metrics and Other Items
. Bookings for the three and nine months ended April 30, 2008 were
$104.8 million and $462.1 million, respectively, compared to
$68.9 million and $294.9 million for the three and nine months
ended April 30, 2007, respectively. Backlog as of April 30, 2008
was $185.9 million compared to $129.0 million as of July 31, 2007
and $153.0 million as of April 30, 2007.
. Earnings before interest, taxes, depreciation and amortization
(EBITDA) were $33.2 million and $97.8 million for the three and
nine months ended April 30, 2008, respectively, as compared to
$28.7 million and $75.3 million for the three and nine months
ended April 30, 2007, respectively.
. Cash provided by operating activities for the first nine months
of fiscal 2008 was $22.1 million, compared to $65.4 million for
the first nine months of fiscal 2007. The decrease in cash
provided by operating activities was driven by an increase in
working capital requirements associated with the significant
increase in sales activity in our mobile data communications and
RF microwave amplifiers segments.
. In our mobile data communications segment, for the three months
ended April 30, 2007, we increased the estimated gross profit on
our original MTS contract, which resulted in an increase to net
sales and operating income of $4.6 million and $3.9 million,
respectively. This adjustment is more fully described in our Form
10-Q filed earlier today.
. Our effective tax rate was 36.1% and 29.0% for the three months
ended April 30, 2008 and 2007, respectively. Our effective tax
rate for the three months ended April 30, 2007 included discrete
tax benefits of approximately $1.6 million. Excluding discrete
tax benefits, our effective tax rate for the three months ended
April 30, 2007 was approximately 35.0%.
Conference Call
The Company has scheduled an investor conference call for 8:30 a.m. (ET) on Thursday, June 5, 2008. Investors and the public are invited to access a live webcast of the conference call from the news section of the Comtech web site at www.comtechtel.com. Alternatively, investors can access the conference call by dialing (800) 862-9098 (domestic) or (785) 424-1051 (international) and using the conference I.D. of "Comtech". A replay of the conference call will be available for seven days by dialing (402) 220-1110. In addition, an updated investor presentation, including earnings guidance, will be available on our web site shortly after the conference call.
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 or ineffective. The Company conducts business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers. The Company sells products to a diverse customer base in the global commercial and government communications markets. The Company believes it is a 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, 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 actual results, future performance and financial condition, and achievement of plans and objectives to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include the timing of receipt of, and the Company's performance on, new 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 results of ongoing investigations into our compliance with export regulations, the risk that the tender offer or merger with Radyne Corporation may not be consummated and that we may not realize the anticipated benefits from this acquisition, 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 Nine months ended
April 30, April 30,
------------------------- ------------------------
2008 2007 2008 2007
------------ ----------- ----------- -----------
Net sales $138,068,000 119,417,000 405,153,000 327,870,000
Cost of sales 77,536,000 67,842,000 227,818,000 187,070,000
------------ ----------- ----------- -----------
Gross profit 60,532,000 51,575,000 177,335,000 140,800,000
------------ ----------- ----------- -----------
Expenses:
Selling, general
and
administrative 22,032,000 18,626,000 63,735,000 53,470,000
Research and
development 10,252,000 8,050,000 30,433,000 22,823,000
Amortization of
intangibles 433,000 700,000 1,246,000 2,028,000
------------ ----------- ----------- -----------
32,717,000 27,376,000 95,414,000 78,321,000
------------ ----------- ----------- -----------
Operating income 27,815,000 24,199,000 81,921,000 62,479,000
Other expense
(income):
Interest expense 668,000 685,000 2,015,000 2,052,000
Interest income
and other (3,080,000) (3,415,000) (11,622,000) (9,905,000)
------------ ----------- ----------- -----------
Income before
provision for
income taxes 30,227,000 26,929,000 91,528,000 70,332,000
Provision for
income taxes 10,922,000 7,801,000 32,060,000 22,206,000
------------ ----------- ----------- -----------
Net income $ 19,305,000 19,128,000 59,468,000 48,126,000
============ =========== =========== ===========
Net income per
share:
Basic $ 0.80 0.83 2.47 2.09
============ =========== =========== ===========
Diluted $ 0.70 0.71 2.15 1.80
============ =========== =========== ===========
Weighted average
number of common
shares outstanding
- basic 24,224,000 23,157,000 24,082,000 23,067,000
============ =========== =========== ===========
Weighted average
number of common
and common
equivalent shares
outstanding assuming
dilution
- diluted 28,220,000 27,552,000 28,244,000 27,478,000
============ =========== =========== ===========
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
April 30, July 31,
2008 2007
Assets ------------ ------------
(Unaudited)
Current assets:
Cash and cash equivalents $361,086,000 342,903,000
Accounts receivable, net 97,483,000 73,585,000
Inventories, net 80,848,000 61,987,000
Prepaid expenses and other
current assets 10,008,000 6,734,000
Deferred tax asset - current 10,524,000 9,380,000
------------ -------------
Total current assets 559,949,000 494,589,000
Property, plant and equipment, net 32,321,000 29,282,000
Goodwill 24,363,000 24,387,000
Intangibles with finite lives, net 5,390,000 5,717,000
Deferred financing costs, net 1,494,000 1,903,000
Other assets, net 624,000 464,000
------------ -------------
Total assets $624,141,000 556,342,000
============ =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 25,749,000 26,137,000
Accrued expenses and other
current liabilities 45,602,000 47,332,000
Customer advances and deposits 19,515,000 20,056,000
Current installments of other
obligations 143,000 135,000
Interest payable 525,000 1,050,000
Income taxes payable - current 4,791,000 2,796,000
------------ -------------
Total current liabilities 96,325,000 97,506,000
Convertible senior notes 105,000,000 105,000,000
Other obligations, less current
installments -- 108,000
Income taxes payable - non-current 2,244,000 --
Deferred tax liability - non-current 864,000 7,960,000
------------ -------------
Total liabilities 204,433,000 210,574,000
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
24,455,273 shares and 24,016,329 shares
at April 30, 2008 and July 31, 2007,
respectively 2,446,000 2,402,000
Additional paid-in capital 180,131,000 165,703,000
Retained earnings 237,316,000 177,848,000
------------ -------------
419,893,000 345,953,000
Less:
Treasury stock (210,937) shares (185,000) (185,000)
------------ -------------
Total stockholders' equity 419,708,000 345,768,000
------------ -------------
Total liabilities and
stockholders' equity $624,141,000 556,342,000
============ =============
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to
GAAP Financial Measures
(Unaudited)
Three Months Ended Nine months Ended
April 30, April 30,
----------------------- ----------------------
2008 2007 2008 2007
----------- ---------- ---------- ----------
Reconciliation of
Non-GAAP Net Income
To GAAP Net Income(1):
Non-GAAP net
income $21,022,000 20,494,000 64,627,000 51,765,000
Amortization of
stock-based
compensation (2,579,000) (1,946,000) (7,850,000) (5,293,000)
Tax effect of
stock-based
compensation
expense 862,000 580,000 2,691,000 1,654,000
----------- ---------- ---------- ----------
GAAP net income $19,305,000 19,128,000 59,468,000 48,126,000
=========== ========== ========== ==========
Reconciliation of
Non-GAAP Diluted
Earnings Per Share
To GAAP Diluted
Earnings Per
Share(1):
Non-GAAP diluted
earnings per
share $ 0.76 0.75 2.31 1.90
Amortization of
stock-based
compensation (0.09) (0.06) (0.25) (0.16)
Tax effect of
stock-based
compensation
expense 0.03 0.02 0.09 0.06
----------- ---------- ---------- ----------
GAAP diluted earnings
per share $ 0.70 0.71 2.15 1.80
=========== ========== ========== ==========
Reconciliation of GAAP
Net Income to
EBITDA(2):
GAAP net income $19,305,000 19,128,000 59,468,000 48,126,000
Income taxes 10,922,000 7,801,000 32,060,000 22,206,000
Net interest income
and other (2,412,000) (2,730,000) (9,607,000) (7,853,000)
Amortization of
stock-based
compensation 2,579,000 1,946,000 7,850,000 5,293,000
Depreciation and
amortization 2,800,000 2,601,000 7,984,000 7,487,000
----------- ---------- ---------- ----------
EBITDA $33,194,000 28,746,000 97,755,000 75,259,000
=========== ========== ========== ==========
(1) Non-GAAP net income is used by management in assessing the
Company's operating results. The Company believes that investors
and analysts may use non-GAAP measures that exclude the
amortization of stock-based compensation, along with other
information contained in its SEC filings, in assessing the
Company's operating results.
(2) Represents earnings before interest, income taxes, depreciation
and amortization of intangibles and stock-based compensation.
EBITDA is a non-GAAP operating metric used by management in
assessing the Company's operating results and ability to meet
debt service requirements. The Company's definition of 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. 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.
ECMTL