MELVILLE, N.Y., Mar 10, 2004 (BUSINESS WIRE) -- Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported its results for the three months ended January 31, 2004. Net sales for the three months ended January 31, 2004 were $56.8 million compared to $42.3 million for the three months ended January 31, 2003.

Net income was $5.2 million, or 34 cents per diluted share, and $1.9 million, or 16 cents per diluted share, for the three months ended January 31, 2004 and 2003, respectively. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased from $4.9 million for the three months ended January 31, 2003 to $9.2 million for the three months ended January 31, 2004.

Net sales for the six months ended January 31, 2004 were $113.1 million compared to $73.6 million for the six months ended January 31, 2003. Net income was $11.0 million, or 71 cents per diluted share, and $2.7 million, or 23 cents per diluted share, for the six months ended January 31, 2004 and 2003, respectively. EBITDA increased from $8.3 million for the six months ended January 31, 2003 to $19.1 million for the six months ended January 31, 2004.

Backlog as of January 31, 2004 was $97.1 million compared to $87.9 million last year and $99.0 million as of October 31, 2003.

In commenting on the Company's performance during the second quarter of fiscal 2004, Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., observed that, "The second quarter of fiscal 2004 was yet another strong showing for Comtech and fiscal 2004 is shaping up to be another record year for our Company. The second quarter was favorably impacted by the timing of anticipated U.S. Army orders in our mobile data communications segment."

Mr. Kornberg added, "In addition to the strong operating results for the quarter, we are equally excited about our convertible senior notes offering which closed in late January. The notes, which bear interest at 2%, leave us with $148 million of cash to continue to implement our growth plans, including potential acquisitions."

Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions addressing commercial and government markets. The Company conducts its business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers. The Company offers specialized products, systems and services where it believes it has technological, engineering, systems design or other expertise that differentiate its product offerings.

The Company has scheduled an investor conference call for 11:30 AM (ET) on Wednesday, March 10, 2004. 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) 832-1508 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (402) 220-4235. In addition, an updated investor presentation, including earnings guidance, will be available on our web site shortly after 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:

    --  Our operating results being difficult to forecast and subject
        to volatility;

    --  Our inability to maintain our government business;

    --  Our inability to keep pace with technological changes;

    --  Our dependence on international sales;

    --  The impact of a continued domestic and foreign economic
        slow-down and reduction in telecommunications equipment and
        systems spending on the demand for our products, systems and
        services;

    --  Our mobile data communications business being in an early
        stage;

    --  Our backlog being subject to cancellation or modification;

    --  Our dependence on component availability, subcontractor
        availability and performance by key suppliers;

    --  Our fixed price contracts being subject to risk;

    --  The impact of adverse regulatory changes on our ability to
        sell products, systems and services;

    --  The impact of prevailing economic and political conditions on
        our businesses;

    --  Whether we can successfully integrate and assimilate the
        operations of acquired businesses;

    --  The impact of the loss of key technical or management
        personnel;

    --  The highly competitive nature of our markets;

    --  Our inability to protect our proprietary technology;

    --  Our operations being subject to environmental regulation;

    --  The impact of recently enacted and proposed changes in
        securities laws and regulations on our costs;

    --  The impact of terrorist attacks and threats, and government
        responses thereto, and threats of war on our businesses; and

    --  Our inability to satisfy our debt obligations, including the
        recently issued convertible senior notes.

                   COMTECH TELECOMMUNICATIONS CORP.
                 Consolidated Statements of Operations
                              (Unaudited)


                      Three months ended         Six months ended
                         January 31,               January 31,
 ------------------------------------------ --------------------------
                       2004        2003          2004         2003
 ------------------------------------------ --------------------------

Net sales          $56,794,000   42,326,000  113,090,000   73,599,000
Cost of sales       36,181,000   28,783,000   71,497,000   48,379,000
                  ----------------------------------------------------
   Gross profit     20,613,000   13,543,000   41,593,000   25,220,000
                  ----------------------------------------------------

Expenses:
   Selling,
    general and
    administrative   8,804,000    6,372,000   17,378,000   12,700,000
   Research and
    development      3,664,000    3,296,000    7,205,000    6,312,000
   Amortization of
    intangibles        499,000      526,000      999,000    1,052,000
                  ----------------------------------------------------
                    12,967,000   10,194,000   25,582,000   20,064,000
                  ----------------------------------------------------

Operating income     7,646,000    3,349,000   16,011,000    5,156,000

Other expense
 (income):
   Interest
    expense             51,000      686,000       75,000    1,377,000
   Interest income    (114,000)     (62,000)    (219,000)    (121,000)
                  ----------------------------------------------------

Income before
 provision for
 income taxes        7,709,000    2,725,000   16,155,000    3,900,000
Provision for
 income taxes        2,466,000      872,000    5,169,000    1,248,000
                  ----------------------------------------------------

Net income         $ 5,243,000    1,853,000   10,986,000    2,652,000
                  ====================================================

Net income per
 share:
   Basic           $      0.37         0.16         0.78         0.24
                  ====================================================
   Diluted         $      0.34         0.16         0.71         0.23
                  ====================================================

Weighted average
 number of common
 shares
    outstanding-
     basic          14,080,000   11,304,000   14,017,000   11,285,000

Potential dilutive
 common shares       1,468,000      584,000    1,438,000      489,000
                  ----------------------------------------------------

Weighted average
 number of common
 and common
 equivalent
 shares
 outstanding
 assuming
 dilution
 - diluted          15,548,000   11,888,000   15,455,000   11,774,000
                  ====================================================

EBITDA  (1)         $9,208,000   4,918,000    19,135,000    8,264,000
                =========================== ==========================

Reconciliation of
 net income to
 EBITDA:
    Net income      $5,243,000    1,853,000   10,986,000    2,652,000
    Income taxes     2,466,000      872,000    5,169,000    1,248,000
    Net interest
     expense
     (income)          (63,000)     624,000     (144,000)   1,256,000
    Depreciation
     and
     amortization    1,562,000    1,569,000    3,124,000    3,108,000
                   ---------------------------------------------------
    EBITDA          $9,208,000    4,918,000   19,135,000    8,264,000
                   ===================================================

(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 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

                                             January 31,    July 31,
                                                  2004        2003
                                             -------------------------
                   Assets                     (Unaudited)
Current assets:
   Cash and cash equivalents                 $148,224,000  48,617,000
   Restricted cash                              4,196,000   4,288,000
   Accounts receivable, less allowance for
    doubtful accounts of  $741,000
      at January 31, 2004 and $912,000 at
       July 31, 2003                           47,726,000  26,696,000
   Inventories, net                            31,771,000  34,048,000
   Prepaid expenses and other current assets    2,858,000   1,742,000
   Deferred tax asset - current                 5,699,000   5,699,000
                                             -------------------------
                 Total current assets         240,474,000 121,090,000

Property, plant and equipment, net             12,559,000  12,328,000
Goodwill and other intangibles with
 indefinite lives                              17,726,000  17,726,000
Intangibles with definite lives, net of
 accumulated amortization of
    $5,719,000 at January 31, 2004 and
     $4,720,000 at July 31, 2003               10,354,000  11,353,000
Deferred financing costs, net                   3,814,000           -
Other assets, net                                 392,000     390,000
Deferred tax asset - non-current                1,363,000   1,363,000
                                             -------------------------
                 Total assets                $286,682,000 164,250,000
                                             =========================

                 Liabilities and Stockholders'
                  Equity

Current liabilities:
  Current installments of capital lease
   obligations                               $    520,000     899,000
  Accounts payable                             13,972,000  11,527,000
  Accrued expenses and other current
   liabilities                                 15,302,000  13,267,000
  Customer advances and deposits                2,894,000   2,491,000
  Deferred service revenue                     12,750,000  11,160,000
  Interest payable                                 29,000           -
  Income taxes payable                          4,779,000   6,945,000
                                             -------------------------
                 Total current liabilities     50,246,000  46,289,000

Convertible senior notes                      105,000,000           -
Capital lease obligations, less current
 installments                                     254,000     393,000
                                             -------------------------
                 Total liabilities            155,500,000  46,682,000

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 14,348,809 shares at
            January 31, 2004 and 14,020,769
            shares at July 31, 2003             1,435,000   1,402,000
    Additional paid-in capital                110,158,000 107,573,000
    Retained earnings                          19,870,000   8,884,000
                                             -------------------------
                                              131,463,000 117,859,000
    Less:
        Treasury stock (140,625 shares)          (185,000)   (185,000)
        Deferred compensation                     (96,000)   (106,000)
                                             -------------------------
                 Total stockholders' equity   131,182,000 117,568,000
                                             -------------------------
                 Total liabilities and
                  stockholders' equity       $286,682,000 164,250,000
                                             =========================
Commitments and contingencies

ECMTL

SOURCE: Comtech Telecommunications Corp.

Comtech Telecommunications Corp.
Media Contacts:
Fred Kornberg or Robert G. Rouse
631-777-8900
Info@comtechtel.com

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