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Comtech Telecommunications Corp. Announces Record First Quarter Results For Fiscal Year 2001

December 13, 2000 at 12:00 AM EST
Comtech Telecommunications Corp. Announces Record First Quarter Results For Fiscal Year 2001 Melville, New York --- December 13, 2000 --- COMTECH TELECOMMUNICATIONS CORP. (NASDAQ: CMTL) today reported sales of $39.8 million, operating earnings of $3.6 million and net income of $2.0 million or $0.25 per share diluted for its first fiscal quarter ended October 31, 2000. For the same quarter of last year, the Company had sales of $11.7 million, operating earnings of $0.9 million, and net income of $0.5 million or $0.11 per share diluted.

Earnings per share were 127% higher than in the first quarter of fiscal 1999 despite the increased number of diluted shares from 5,082,000 to 7,891,000 primarily as a result of our follow-on offering in February.

Revenues were 239% higher in the first three months of fiscal 2001 than a year earlier. Revenue contribution from EF Data Corp., which Comtech acquired on July 10, 2000, was $23.0 million. Operating earnings increased by 310%, and net income increased by 275%. Net earnings were also adversely affected by the continuing start-up expenses associated with the Company's Mobile Data Communications Services segment.

Reference is made to the attached tables for further information.

Backlog as of October 31, 2000 was $44.8 million, including $16.6 million from EF Data, compared to $36.2 million a year earlier.

Fred Kornberg, President and Chief Executive Officer, said, "I am pleased that fiscal 2001 is off to a great start with another record quarter for Comtech, driven by our telecommunications transmission segment.

"Our mobile datacom segment continued to progress as well. To date we received approximately $5.1 million from the U.S. Army including our $3.1 million order announced last quarter. We are on schedule to equip approximately 500 U.S. Army trucks with Movement Tracking Systems (MTS) by the end of the second quarter. Based on our assessment of the Army's budget delays for MTS, we now expect to receive additional orders under this contract in the third and fourth quarters of the current fiscal year. Following our strategy to accompany U. S. Government deployment of our satellite tracking technology with commercial deployment, we hope to secure our first commercial order during the second half of the year, marking our initial penetration into a potentially huge market for these types of mobile satellite fleet tracking systems."

Kornberg continued, "With the integration of Comtech EF Data complete, we are poised for continued strong growth in our telecommunications transmission segment. Based on our past annual revenue performance we have previously indicated that we expect an increase in revenues of between 130-140% and approximately 30% earnings growth for fiscal 2001 which would make fiscal 2001 a record year in all respects - revenues, operating profits, and EPS."

Mr. Kornberg concluded: "Our core business has been consistently reporting strong growth for over five years and the EF Data acquisition has significantly heightened our expectations and added to this core segment. This quarter we've posted record revenues and we were named one of the 200 Best Small Companies in America by Forbes Magazine in recognition of our past annual revenue and EPS growth as well as our return on equity. We have also received a Certificate of Achievement in recognition of ranking No. 19 in Gene Walden's book, The 100 Best Stocks to Own for Under $25, 2nd Edition. Both internal growth and acquisitions have been sharing the spotlight, and we expect this to continue.

Comtech Telecommunications Corp. (www.comtechtel.com) is an innovative player in domestic and global high-technology markets. Through its operating units, Comtech pursues opportunities in three interrelated market segments: telecommunications transmission, RF microwave amplifiers, and mobile data communications services. In each of these segments, growth is driven by increasing demand for telecommunications infrastructure and network and messaging services. The company's specialties include the design and manufacture of advanced products and networks used for transmission of voice, data and video using satellite, over the horizon microwave, terrestrial line of sight and other wireless communications systems. More than 275 distinct Comtech products are in service in more than 100 countries.

The Company has scheduled an investor conference call for 11:00AM EDT Wednesday, December 13, 2000. 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.

Certain of the statements contained herein, 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 are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. Included among the factors which might cause such results to differ are: the Company's ability to keep pace with rapid technological changes; our backlog being subject to customer cancellation or modification; our sales to the U. S. Government being subject to funding, deployment and other

risks; our fixed price contracts being subject to risk; the highly competitive nature of our markets; our dependence on component availability, subcontractor availability and performance by key suppliers; our dependence on international sales; our mobile data communications business being in a developmental stage. Additionally, these forward-looking statements are qualified in their entirety by cautionary statements contained in the Company's Securities and Exchange Commission filings.