Comtech Telecommunications Corp. Announces Second Quarter Results for Fiscal 2003
Comtech Telecommunications Corp. Announces Second Quarter Results for Fiscal 2003
MELVILLE, N.Y.--(BUSINESS WIRE)--March 12, 2003--Comtech
Telecommunications Corp. (Nasdaq: CMTL)
Sales increase by 39% to $42.3 million from prior year second
quarter sales of $30.5 million
EBITDA increases by 145% from $2.0 million to $4.9 million
Diluted earnings per share increase from 2 cents to 23 cents
Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported its
results for the three months ended January 31, 2003.
Net sales for the three months ended January 31, 2003 were $42.3
million compared to $30.5 million for the three months ended January
31, 2002. For sequential comparison purposes, sales for the three
months ended October 31, 2002 were $31.3 million.
Earnings before interest, income taxes, depreciation and
amortization (EBITDA) increased from $2.0 million for the three months
ended January 31, 2002 to $4.9 million for the three months ended
January 31, 2003. Net income was $1.9 million, or 23 cents per diluted
share, and $148,000, or 2 cents per diluted share, for the three month
periods ended January 31, 2003 and 2002, respectively.
Net sales for the six months ended January 31, 2003 were $73.6
million compared to $61.6 million for the six months ended January 31,
2002. EBITDA increased from $5.6 million for the six months ended
January 31, 2002 to $8.3 million for the six months ended January 31,
2003. Net income was $2.7 million, or 34 cents per diluted share, and
$1.1 million, or 13 cents per diluted share, for the six months ended
January 31, 2003 and 2002, respectively.
Backlog as of January 31, 2003 was $87.9 million compared to $49.0
million last year and $85.5 million as of October 31, 2002.
In commenting on the Company's performance during the second
quarter of fiscal 2003, Fred Kornberg, President and Chief Executive
Officer of Comtech Telecommunications Corp., observed that, "the
significant increase in sales on both a year-to-year and sequential
basis is largely the result of record revenues in our mobile data
communications services segment. These record revenues were due to
higher sales of our Movement Tracking System to the U.S. Army and
sales relating to an order from a major U.S. prime contractor that is
providing a battle command location and messaging application to the
U.S. Army."
Mr. Kornberg added, "This increase in sales, combined with
continued solid performances in our other segments, resulted in an
impressive increase in diluted earnings per share from 2 cents in the
second quarter of fiscal 2002 to 23 cents in the second quarter of
fiscal 2003."
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 Wednesday, March 12, 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) 451-7724 (domestic), or (785)
832-1077 (international) and using the conference I.D. of "Comtech."
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 Six Months Ended
January 31, January 31,
----------------------- -----------------------
2003 2002 2003 2002
----------------------- -----------------------
Net sales $42,326,000 30,525,000 73,599,000 61,570,000
Cost of sales 28,783,000 21,406,00 48,379,000 41,646,000
----------------------- -----------------------
Gross profit 13,543,000 9,119,000 25,220,000 19,924,000
----------------------- -----------------------
Expenses:
Selling, general
and administrative 6,372,000 5,304,000 12,700,000 10,877,000
Research and
development 3,296,000 2,712,000 6,312,000 5,360,000
Amortization
of intangibles 526,000 370,000 1,052,000 731,000
----------- ---------- ----------- -----------
10,194,000 8,386,000 20,064,000 16,968,000
----------- ---------- ----------- -----------
Operating income 3,349,000 733,000 5,156,000 2,956,000
Other
expense (income):
Interest expense 686,000 683,000 1,377,000 1,656,000
Interest income (62,000) (98,000) (121,000) (280,000)
----------- --------- ----------- ----------
Income before
provision for
income taxes 2,725,000 148,000 3,900,000 1,580,000
Provision for
income taxes 872,000 - 1,248,000 530,000
----------- --------- ----------- ----------
Net income $1,853,000 148,000 2,652,000 1,050,000
=========== ========= =========== ==========
Net income per share:
Basic $0.25 0.02 0.35 0.14
Diluted $0.23 0.02 0.34 0.13
Weighted average
number of
common shares
outstanding
- basic computation 7,536,000 7,440,000 7,523,000 7,439,000
Potential dilutive
common shares 389,000 453,000 326,000 499,000
----------- --------- ----------- ----------
Weighted average
number of common
and common
equivalent shares
outstanding assuming
dilution -
diluted computation 7,925,000 7,893,000 7,849,000 7,938,000
=========== ========= =========== ==========
EBITDA (1) $4,918,000 2,037,000 8,264,000 5,602,000
=========== ========= =========== ==========
Reconciliation of
net income
to EBITDA:
Net income $1,853,000 148,000 2,652,000 1,050,000
Income taxes 872,000 - 1,248,000 530,000
Net interest expense 624,000 585,000 1,256,000 1,376,000
Depreciation
and amortization 1,569,000 1,304,000 3,108,000 2,646,000
----------- --------- ----------- ----------
EBITDA $4,918,000 2,037,000 8,264,000 5,602,000
=========== ========= =========== ==========
(1) Represents earnings before interest, income taxes,
depreciation and amortization.
COMTECH TELECOMMUNICATIONS CORP.
Consolidated Balance Sheets
January 31, July 31,
2003 2002
(Unaudited) (Audited)
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $27,301,000 15,510,000
Accounts receivable, net 33,833,000 27,435,000
Inventories, net 28,153,000 33,996,000
Prepaid expenses and
other current assets 1,405,000 1,407,000
Deferred tax asset - current 2,492,000 2,492,000
-------------------------
Total current assets 93,184,000 80,840,000
Property, plant and equipment, net 11,882,000 11,889,000
Goodwill and other intangibles
with indefinite lives 17,726,000 17,726,000
Other intangibles with
definite lives, net 11,925,000 12,902,000
Other assets, net 497,000 661,000
Deferred tax asset - non-current 2,568,000 2,568,000
-------------------------
Total assets $137,782,000 126,586,000
=========================
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $1,983,000 -
Current installments of capital
lease obligations 1,043,000 1,062,000
Accounts payable 9,895,000 9,529,000
Accrued expenses and other
current liabilities 9,776,000 9,686,000
Customer advances and deposits 8,373,000 2,173,000
Deferred service revenue 5,048,000 4,343,000
Income taxes payable 3,798,000 2,470,000
-------------------------
Total current liabilities 39,916,000 29,263,000
Long-term debt, less
current installments 26,700,000 28,683,000
Capital lease obligations,
less current installments 779,000 1,294,000
Other long-term liabilities 4,000 58,000
-------------------------
Total liabilities 67,399,000 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
7,656,387 shares at January 31, 2003
and 7,602,921 shares
at July 31, 2002 766,000 760,000
Additional paid-in capital 68,182,000 67,883,000
Retained earnings (accumulated deficit) 1,827,000 (825,000)
-------------------------
70,775,000 67,818,000
Less:
Treasury stock (93,750 shares) (185,000) (185,000)
Deferred compensation (207,000) (345,000)
-------------------------
Total stockholders' equity 70,383,000 67,288,000
-------------------------
Total liabilities and
stockholders' equity $137,782,000 126,586,000
=========================
Commitments and contingencies