Comtech Telecommunications Posts Strong Gains In Third Quarter Of Fiscal Year 2001
June 6, 2001 at 12:00 AM EDT
Comtech Telecommunications Posts Strong Gains In Third Quarter Of Fiscal Year 2001
Sales and Net Earnings Up 109% and 57% Respectively
EPS Increased by 46%
Record Results Expected for Fiscal Year As Whole
Melville, New York - June 6, 2001 --- Comtech Telecommunications Corp. (Nasdaq: CMTL) today announced increased sales, operating income and earnings per share for the third fiscal quarter ended on April 30, 2001, compared to the same period a year ago.
Third Quarter Results
For the 2001 third quarter, sales increased 109% to $32.3 million, compared to sales of $15.5 million for the same period in 2000.
Operating income in the third quarter of 2001 was $3.9 million, a 300% increase over operating income of $968,000 for the same period in 2000. As a percentage of sales, operating income was 12.0% in the third quarter of 2001, versus 6.3% in the same period in 2000.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $5.4 million for the third quarter of 2001, compared to $1.4 million for the same period in 2000, or an increase of 293%.
Net income for the third quarter of 2001 rose 57% to $1.5 million, compared with net income of $971,000 a year ago. Diluted earnings per share rose 46% to $0.19 per diluted share, versus $0.13 per diluted share for the same period in 2000.
Nine Months Results
For the first nine months of 2001, sales increased 157% to $105.3 million, compared to sales of $41.0 million for the same period in 2000.
Operating income for the first nine months of 2001 was $10.7 million, a 271% increase over operating income of $2.9 million for the same period in 2000. As a percentage of sales, operating income was 10.1% for the nine months of 2001, versus 7.0% in the same period in 2000.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $15.6 million for the first nine months of 2001, compared to $4.1 million for the same period in 2000, or an increase of 279%.
Net income for the first nine months of 2001 rose 149% to $5.4 million, compared with net income of $2.2 million a year ago. Diluted earnings per share rose 82%
to $0.69 per diluted share, versus $0.38 per diluted share for the same period in 2000.
Bookings for the Company's products continued to exhibit strength, with funded orders in the third quarter of 2001 increasing to $44.3 million compared to $20.0 million in the same period a year ago. Backlog increased 36% to $47.9 million at April 30, 2001, compared to $35.3 million at April 30, 2000. Backlog and bookings include approximately $16 million of contracts from our acquisition of the RF amplifier product line of MPD Technologies, Inc., which closed on April 30, 2001.
Reference is made to the attached tables for further information on consolidated financial results.
"We had a good third quarter," commented Fred Kornberg, Comtech's Chief Executive Officer.
"Our telecommunications transmission business was a strong contributor to our overall performance," continued Mr. Kornberg. He noted the Company introduced a number of new products at the Satellite 2001 and NAB tradeshows. Among these were the Model CIM-550T Modem which is the first Internet enabled satellite modem with a built-in 100 base T Ethernet port, DES encryption, IP acceleration, quality of service (QoS) and routing functions. Also introduced was our Model CDM-600, a 20Mbps, open network modem. Both of these modems utilize Comtech's proprietary turbo codec algorithm.
"We also achieved some important milestones in our Mobile Data Communications Services business," continued Mr. Kornberg. We received $3.5 million in new orders for equipment and services to be used in the U. S. Army's Movement Tracking System (MTS) program. This is the second large order received by Comtech under an eight-year contract that has a potential total value of $418 million. The new order covers delivery of satellite tracking and messaging equipment and installation for approximately 400 additional Army logistics vehicles and mobile control stations. Previous orders under the contract have involved delivery and installation of approximately 500 systems.
"The U. S. Army performed two major training exercises in which the MTS stood out as a stellar contributor. In both exercises, the MTS enabled field commanders to maintain continuous contact with their units in the field, and to respond in real time to the challenges that are a part of the logisticians' everyday experience. Although slow to develop, the MTS program seems now to be moving faster. The positive reaction from all elements of the U. S. Army has been very gratifying.
"We also booked our first large commercial order which came from a Venezuela value added reseller, for 500 terminals to be used by truckers as well as the installation of a data center.
"Our RF microwave amplifier segment, which had been faced with sluggish market conditions, posted revenues well above its year-earlier total. On April 30, 2001 we completed the acquisition of the RF microwave amplifier product line of MPD Technologies, Inc. We believe this to be an excellent acquisition for Comtech and one that extends our capabilities into several key, growing markets including the medical, defense and commercial satellite and is a natural extension of our RF microwave amplifier business. By combining complementary products and technologies with our Comtech PST subsidiary, the acquisition will allow Comtech PST to further broaden its product offerings and give us a strong platform from which to bring additional innovative products to market. We expect revenues from our RF microwave amplifier segment to more than double in our next fiscal year. "
"The areas we are particularly excited about are the sophisticated linear amplifiers which we will be supplying to Siemens and Varian for use in medical oncology systems and Rockwell Collins for use in their air transport system for telephone communications between commercial aircraft and ground via satellite. "
Mr. Kornberg added, "while the first nine months were solid, they were nonetheless somewhat affected by a difficult market, reflected in some slowdown in orders. Some of our telecommunications customers are putting some projects on hold due to the continued uncertainty surrounding a global slowdown. Overall, this slowdown has not blocked the excellent progress we have been making in the execution of our strategy." Mr. Kornberg said, "we expect the year's record sales and record earnings per share to be in the neighborhood of $135 million and $0.85 per share fully diluted. With our broad line of market leading products we look forward with confidence to the balance of 2001".
In conjunction with this release the Company will host a conference call, which will be simultaneously broadcast live over the Internet. Fred Kornberg, President and Chief Executive Officer, J. Preston Windus, Chief Financial Officer, and Rosalie Kosonen, Corporate Communications, will host the call which is scheduled for Wednesday, June 6, 2001 at 11:00 a.m. EDT. Listeners can access the conference call live and archived over the Internet from the news section of the Comtech Website, www.comtechtel.com. A replay of the webcast will be available at the same location for 30 days following the conference call.
Headquartered in Melville, New York, Comtech Telecommunications Corp. is an innovative player in the 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 is 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. To learn more about the Company, please visit the Company's Website at www.comtechtel.com.
Certain information contained herein 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. Included among the factors which might cause such results to differ are: among others, the Company's mobile data communications business being in a developmental stage; our inability to keep pace with rapid technological changes; the highly competitive nature of our markets; our dependence on international sales; and other risk factors detailed in the company's Form 10-K and other cautionary statements contained in the Company's Securities and Exchange Commission filings.