Comtech Telecommunications Corp. Announces Record Third Quarter Results for Fiscal 2003
MELVILLE, N.Y., Jun 5, 2003 (BUSINESS WIRE) --
Comtech Telecommunications Corp. (Nasdaq: CMTL):
-- Sales increased by 67% from $29.3 million to $48.8 million
-- Diluted earnings per share increased by 760% from 5 cents to
43 cents
-- EBITDA increased by 192% from $2.5 million to $7.2 million
Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported its results for the three months ended April 30, 2003.
Net sales for the three months ended April 30, 2003 were $48.8 million compared to $29.3 million for the three months ended April 30, 2002.
Net income was $3.5 million, or 43 cents per diluted share, and $0.4 million or 5 cents per diluted share, for the three month periods ended April 30, 2003 and 2002, respectively. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased to $7.2 million for the three months ended April 30, 2003 from $2.5 million for the three months ended April 30, 2002.
Net sales for the nine months ended April 30, 2003 were $122.4 million compared to $90.8 million for the nine months ended April 30, 2002. Net income was $6.1 million, or 77 cents per diluted share, and $1.5 million, or 18 cents per diluted share, for the nine months ended April 30, 2003 and 2002, respectively. EBITDA increased to $15.5 million for the nine months ended April 30, 2003 from $8.1 million for the nine months ended April 30, 2002.
The significant increase in profitability for the three and nine months ended April 30, 2003 reflects additional gross profit on the increased sales, partially offset by higher selling, general and administrative expenses and research and development expenses.
Backlog as of April 30, 2003 was $115.9 million compared to $47.3 million last year and $87.9 million as of January 31, 2003.
Cash as of April 30, 2003 increased to $31.3 million, excluding restricted cash of $4.2 million, primarily as a result of strong cash flow from operations.
In commenting on the Company's performance during the third quarter of fiscal 2003, Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., said, "The third quarter was an outstanding one for Comtech. Sales and earnings were at record levels. We believe our performance continues to validate our strategic plan."
Mr. Kornberg added, "The third quarter of fiscal 2003 was favorably impacted by strong sales in our mobile data communications services segment due to the acceleration of the Army's rollout of our product in connection with the recent conflict in Iraq. In addition, sales of satellite earth station equipment and over-the-horizon microwave systems in our telecommunications transmission segment were also strong."
Comtech Telecommunications Corp. 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 has been 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 300 distinct Comtech products are in service in more than 100 countries.
The Company has scheduled an investor conference call for 11:30 AM (ET) on Thursday, June 5, 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) 245-3043 (domestic), or (785) 832-0326 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (402) 220-0863. In addition, an updated investor presentation will be available on our web site shortly after our 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:
-- the impact of a continued domestic and foreign economic
slow-down on the demand for our products and services,
particularly in the telecommunications industry;
-- risks associated with our mobile data communications business
being in an early stage;
-- our potential inability 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 risks;
-- our dependence on component availability, subcontractor
availability and performance by key suppliers;
-- the highly competitive nature of our markets;
-- our dependence on international sales;
-- the adverse effect on demand for our products and services
that would be caused by a decrease in the value of foreign
currencies relative to the U.S. dollar;
-- the potential entry of new competitors in all of our segments;
-- uncertainty whether the satellite communications industry or
infrastructure will continue to develop and the market will
grow;
-- uncertainty whether the Internet will continue to grow in
international markets;
-- the potential impact of increased competition on prices,
profit margins and market share for the Company's products and
services;
-- the availability of satellite capacity on a leased basis
needed to provide the necessary global coverage for our mobile
data communications services;
-- whether we can successfully implement our satellite mobile
data communications services and achieve recurring revenues
for such services; and
-- whether we can successfully combine and assimilate the
operations of acquired businesses and product lines.
COMTECH TELECOMMUNICATIONS CORP.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
April 30, April 30,
----------------------- -----------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $ 48,753,000 29,262,000 122,352,000 90,832,000
Cost of sales 32,262,000 19,364,000 80,641,000 61,010,000
----------- ----------- ----------- -----------
Gross profit 16,491,000 9,898,000 41,711,000 29,822,000
----------- ----------- ----------- -----------
Expenses:
Selling, general
and administrative 7,270,000 5,531,000 19,970,000 16,408,000
Research and
development 3,014,000 2,797,000 9,326,000 8,157,000
Amortization of
intangibles 488,000 370,000 1,540,000 1,101,000
----------- ----------- ----------- -----------
10,772,000 8,698,000 30,836,000 25,666,000
----------- ----------- ----------- -----------
Operating income 5,719,000 1,200,000 10,875,000 4,156,000
Other expense (income):
Interest expense 682,000 692,000 2,059,000 2,348,000
Interest income (66,000) (90,000) (187,000) (370,000)
----------- ----------- ----------- -----------
Income before
provision for income
taxes 5,103,000 598,000 9,003,000 2,178,000
Provision for income
taxes 1,633,000 189,000 2,881,000 719,000
----------- ----------- ----------- -----------
Net income $ 3,470,000 409,000 6,122,000 1,459,000
=========== =========== =========== ===========
Net income per share:
Basic $ 0.46 0.06 0.81 0.20
=========== =========== =========== ===========
Diluted $ 0.43 0.05 0.77 0.18
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding -
basic computation 7,567,000 7,474,000 7,538,000 7,450,000
Potential dilutive
common shares 474,000 380,000 375,000 459,000
----------- ----------- ----------- -----------
Weighted average
number of common and
common equivalent
shares outstanding
assuming dilution -
diluted computation 8,041,000 7,854,000 7,913,000 7,909,000
=========== =========== =========== ===========
EBITDA (1) $ 7,228,000 2,479,000 15,492,000 8,081,000
=========== =========== =========== ===========
Reconciliation of net
income to EBITDA:
Net income $ 3,470,000 409,000 6,122,000 1,459,000
Income taxes 1,633,000 189,000 2,881,000 719,000
Net interest expense 616,000 602,000 1,872,000 1,978,000
Depreciation and
amortization 1,509,000 1,279,000 4,617,000 3,925,000
----------- ----------- ----------- -----------
EBITDA $ 7,228,000 2,479,000 15,492,000 8,081,000
=========== =========== =========== ===========
(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,
2003 2002
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 31,297,000 15,510,000
Restricted cash 4,247,000 -
Accounts receivable, net 31,675,000 27,435,000
Inventories, net 32,236,000 33,996,000
Prepaid expenses and other current assets 1,879,000 1,407,000
Deferred tax asset - current 2,492,000 2,492,000
------------ ------------
Total current assets 103,826,000 80,840,000
Property, plant and equipment, net 12,121,000 11,889,000
Goodwill and other intangibles with
indefinite lives 17,726,000 17,726,000
Other intangibles with definite lives, net 11,852,000 12,902,000
Other assets, net 549,000 661,000
Deferred tax asset - non-current 2,568,000 2,568,000
------------ ------------
Total assets $148,642,000 126,586,000
============ ============
Liabilities and Stockholders'
Equity
Current liabilities:
Current installments of long-term debt $ 1,983,000 -
Current installments of capital lease
obligations 1,011,000 1,062,000
Accounts payable 11,726,000 9,529,000
Accrued expenses and other current
liabilities 11,754,000 9,686,000
Customer advances and deposits 6,783,000 2,173,000
Deferred service revenue 8,675,000 4,343,000
Income taxes payable 5,431,000 2,470,000
------------ ------------
Total current liabilities 47,363,000 29,263,000
Long-term debt, less current installments 26,700,000 28,683,000
Capital lease obligations, less current
installments 543,000 1,294,000
Other long-term liabilities 12,000 58,000
------------ ------------
Total liabilities 74,618,000 59,298,000
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
7,674,345 shares at April 30, 2003 and
7,602,921 shares at July 31, 2002 767,000 760,000
Additional paid-in capital 68,328,000 67,883,000
Retained earnings (accumulated deficit) 5,297,000 (825,000)
------------ ------------
74,392,000 67,818,000
Less:
Treasury stock (93,750 shares) (185,000) (185,000)
Deferred compensation (183,000) (345,000)
------------ ------------
Total stockholders' equity 74,024,000 67,288,000
------------ ------------
Total liabilities and
stockholders' equity $148,642,000 126,586,000
============ ============
Commitments and contingencies
ECMTL
SOURCE: Comtech Telecommunications Corp.
Comtech Telecommunications Corp.
Fred Kornberg
Robert G. Rouse
631/777-8900
Info@comtechtel.com
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