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Comtech Telecommunications Corp. Announces Second Quarter Results For Fiscal 1999

March 4, 1999 at 12:00 AM EST
Comtech Telecommunications Corp. Announces Second Quarter Results For Fiscal 1999 Melville, New York --- March 4, 1999 --- COMTECH TELECOMMUNICATIONS CORP. (NASDAQ/NMS: CMTL) today reported for the second quarter ended January 31, 1999, sales of $9,057,000, earnings from operations of $381,000, and after a non-recurring tax benefit of $1,420,000, net income of $1,774,000 or $.65 per share. For the same quarter of last year, the Company had sales of $7,700,000, earnings from operations of $362,000 and net income of $317,000 or $.12 per share.

For the first six months of fiscal 1999, the Company reported sales of $17,792,000, earnings from operations of $820,000 and after the non-recurring tax benefit, net income of $2,168,000 or $.81 per share as compared to sales of $13,634,000, earnings from operations of $491,000 and net income of $421,000, or $.16 per share for the six month period in fiscal 1998.

Backlog at January 31, 1999 was $49,393,000 as compared to $17,219,000 a year before and $15,452,000 at July 31, 1998. The increase in backlog is a result of the large order reported in the first quarter. Other bookings continue to be affected by the economic difficulties in the Pacific Rim, Brazil and other international markets.

Revenues for the three and six month periods of the fiscal year increased by 18% and 30% respectively over last fiscal year, earnings from operations increased by 5% and 67%. Net earnings and earnings per share for the second quarter and six month periods reflected a non-recurring gain of $1,420,000 or approximately $.52 per share resulting from taking into earnings a reduction in the Company's valuation allowance against deferred tax assets relating to federal income tax loss carryforwards. These periods were also effected by expenses associated with the Company's start-up subsidiaries, Comtech Wireless Inc. and Comtech Mobile Datacom Corp., which sustained aggregate losses of $350,000, or $.12 per share. Expenses associated with the start-ups are expected to continue to impact results for at least the balance of this year.

Under applicable accounting principles, the Company was required to reduce its valuation allowance against approximately $4.2 million of its $11.5 million net operating loss carryforward and take it into income during the second quarter of this year since it believes that it is more likely than not that the Company will generate sufficient taxable income prior to that portion of its NOL carryforward expiring. The Company will continue to assess its remaining NOL with this principle in mind.

In reporting these results, Mr. Fred Kornberg, President and CEO, noted "I am pleased to report that fiscal year 1999 continues to go well and that results for the second quarter ended January 31, 1999 were on target with our expectations. In addition to focusing on our new subsidiaries, we are continuing to strengthen our market position in Europe, South America and the Mid East. On balance," Mr. Kornberg said, "I look forward to the second half of the year with confidence."

At the Annual Stockholders' Meeting held on December 15, 1998, Mr. Fred Kornberg and Mr. Sol S. Weiner were reelected as Directors for a three year term and the Stockholders also approved the selection of KPMG LLP as auditors.

Comtech, through its operating units, is a broad based manufacturer of state-of-the-art solid state high power amplifiers and high technology satellite and troposcatter telecommunication products and systems for commercial and government applications.

Certain information contained herein includes information that is forward-looking. The matters referred to in forward-looking statements may be affected by the risks and uncertainties involved in the Company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in the Company's Securities and Exchange Commission filings.