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Comtech Telecommunications Corp. Announces Results for Fiscal Year 2002

October 16, 2002 at 12:00 AM EDT
Comtech Telecommunications Corp. Announces Results for Fiscal Year 2002 Melville, New York - October 16, 2002 - Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported its results for the fiscal year ended July 31, 2002. Net sales for the year were $119.4 million and net income, excluding a non-recurring charge and tax benefit, was $2.0 million, or $0.25 per diluted share, compared to net sales of $135.9 million and net income of $6.7 million, or $0.85 per diluted share, in fiscal 2001. The fourth quarter of fiscal 2002 included (i) a non-recurring charge of $2.2 million for acquired in-process research and development in connection with the acquisition of certain assets and liabilities of Advanced Hardware Architectures, Inc. in July 2002 and (ii) a tax benefit relating to research and experimentation credits. Fiscal 2002 net income, including the above, was $1.1 million, or $0.15 per diluted share.

Net sales for the fourth quarter of fiscal 2002 were $28.5 million, compared to $30.7 million in fiscal 2001. Fourth quarter net income, excluding the non-recurring charge and tax benefit, was $0.5 million, or $0.07 per diluted share, in fiscal 2002, as compared to net income in the fourth quarter of fiscal 2001 of $1.3 million, or $0.16 per diluted share. Fiscal 2002 fourth quarter net loss, including the non-recurring items, was $0.3 million, or $0.04 per diluted share.

Reference is made to the attached tables for further information.

Backlog as of July 31, 2002 was $44.1 million compared to $50.1 million a year earlier.

Fred Kornberg, President and CEO, observed, "Fiscal 2002 was a challenging year for all technology companies, particularly in the telecommunications sector. In fiscal 2002, Comtech proved that it can successfully deal with the challenges that an unprecedented downturn brings, just as we displayed our ability to thrive in a robust economic environment prior to fiscal 2002."

Mr. Kornberg added, "We remained profitable and generated strong cash flow, while continuing to invest in the future through an increase in research and development spending. We believe our continuing investment in product enhancements and new product development will put us in a position to weather the current economic storm quite well, and more importantly give us significant competitive advantages when conditions improve."

Mr. Kornberg concluded, "Fiscal 2003 promises to be both a challenging and exciting year. Although conditions remain soft in some of our product lines, we have seen a significant increase in interest in our over-the-horizon microwave product lines. Subsequent to July 31, 2002, we booked a $42 million order in this area."

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 275 distinct Comtech products are in service in more than 100 countries.

The Company has scheduled an investor conference call for 11:30 AM (ET) Wednesday, October 16, 2002. 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 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.