MELVILLE, N.Y., Sept. 17, 2008 (GLOBE NEWSWIRE) -- Comtech Telecommunications Corp. (Nasdaq:CMTL) today reported its operating results for the fourth quarter and fiscal year ended July 31, 2008. Net sales, operating income, EBITDA, net income and diluted earnings per share for the full year reached record levels.
Net sales for the fourth quarter of fiscal 2008 were $126.5 million compared to $117.8 million for the fourth quarter of fiscal 2007, reflecting significant growth in both the telecommunications transmission and RF microwave amplifiers segments, partially offset by lower sales in the mobile data communications segment.
GAAP net income was $17.0 million, or $0.61 per diluted share, for the three months ended July 31, 2008 compared to $17.1 million, or $0.63 per diluted share, for the three months ended July 31, 2007. Non-GAAP net income, which excludes the amortization of stock-based compensation expense, was $18.8 million, or $0.67 per diluted share, for the three months ended July 31, 2008 as compared to Non-GAAP net income of $18.5 million, or $0.67 per diluted share, for the three months ended July 31, 2007. The GAAP and Non-GAAP results for the three months ended July 31, 2007, include a favorable cumulative gross profit adjustment, which resulted in an increase to operating income of $5.3 million.
Net sales for the twelve months ended July 31, 2008 were $531.6 million, compared to $445.7 million for the twelve months ended July 31, 2007. GAAP net income was $76.4 million, or $2.76 per diluted share, for the twelve months ended July 31, 2008 compared to $65.2 million, or $2.42 per diluted share, for the twelve months ended July 31, 2007. Non-GAAP net income, which excludes the amortization of stock-based compensation expense, was $83.4 million, or $2.98 per diluted share, for the twelve months ended July 31, 2008 as compared to Non-GAAP net income of $70.2 million, or $2.57 per diluted share, for the twelve months ended July 31, 2007.
In commenting on the Company's performance during the fourth quarter of fiscal 2008, Fred Kornberg, President and Chief Executive Officer, noted, "The fourth quarter was an outstanding finish to another record year for Comtech. The acquisition of Radyne Corporation closed on August 1, 2008 and the execution of our integration and restructuring plans is well underway. We continue to see strong demand for our products in all three of our business segments and we believe that fiscal 2009 will be another record year for Comtech, on both the top and bottom line."
Selected Fiscal 2008 Fourth Quarter and Fiscal 2008 Full Year Financial Metrics and Other Items
* At July 31, 2008, we had $410.1 million of unrestricted cash and
cash equivalents on hand. On August 1, 2008 (the beginning of our
fiscal year 2009), and as more fully described in our Form 10-K
filed earlier today, we purchased Radyne Corporation using a
portion of our existing cash and cash equivalents for a
preliminary aggregate purchase price of approximately $231.7
million (including estimated transaction costs and payments made
for outstanding share-based stock awards).
* Bookings for the three and twelve months ended July 31, 2008 were
$141.7 million and $603.7 million, respectively, compared to $93.8
million and $388.7 million for the three and twelve months ended
July 31, 2007, respectively. Backlog as of July 31, 2008 was
$201.1 million compared to $185.9 million as of April 30, 2008 and
$129.0 million as of July 31, 2007.
* Earnings before interest, taxes, depreciation and amortization
("EBITDA") were $30.6 million and $128.3 million for the three and
twelve months ended July 31, 2008, respectively, versus $27.2
million and $102.5 million for the three and twelve months ended
July 31, 2007, respectively.
* Cash provided by operating activities for fiscal 2008 was $77.8
million compared to $89.2 million for fiscal 2007. The decrease in
cash provided by operating activities was driven by an increase in
working capital requirements associated with the significant
increase in sales activity in our mobile data communications and
RF microwave amplifiers segments.
* Interest income was $2.4 million for the three months ended July
31, 2008 as compared to $4.3 million for the three months ended
July 31, 2007. The decrease in interest income was due to the
significant year-over-year decline in interest rates partially
offset by an increase in investable cash.
* In our mobile data communications segment, for the three months
ended July 31, 2007, we finalized the total contract costs on our
original MTS contract, which resulted in an increase to gross
profit and operating income of $6.1 million and $5.3 million,
respectively.
* Our effective tax rate was 36.3% and 34.5% in the fourth quarter
of fiscal 2008 and fiscal 2007, respectively. Our effective tax
rate for the fourth quarter and full fiscal year 2008, excluding
certain adjustments which are more fully described in our Form
10-K filed earlier today, approximated 35.3%.
Conference Call
The Company has scheduled an investor conference call for 8:30 AM (ET) on Thursday, September 18, 2008. Investors and the public are invited to access a live webcast of the conference call from the news section of the Comtech web site at www.comtechtel.com. Alternatively, investors can access the conference call by dialing (800) 894-5910 (domestic) or (785) 424-1052 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (402) 220-1115. In addition, an updated investor presentation, including earnings guidance, will be available on our web site shortly after the conference call.
About Comtech
Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The Company believes many of its solutions play a vital role in providing or enhancing communication capabilities when terrestrial communications infrastructure is unavailable or ineffective. The Company conducts business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers. The Company sells products to a diverse customer base in the global commercial and government communications markets. The Company believes it is a market leader in the market segments that it serves.
Cautionary Statement Regarding Forward-Looking Statements
Certain information in this press release contains forward-looking statements, including but not limited to, information relating to the Company's future performance and financial condition, plans and objectives of the Company's management and the Company's assumptions regarding such future performance, financial condition, plans and objectives that involve certain significant known and unknown risks and uncertainties and other factors not under the Company's control which may cause actual results, future performance and financial condition, and achievement of plans and objectives of the Company's management to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include the timing of receipt of, and the Company's performance on, new orders that can cause significant fluctuations in net sales and operating results, the timing and funding of government contracts, adjustments to gross profits on long-term contracts, risks associated with international sales, rapid technological change, evolving industry standards, frequent new product announcements and enhancements, changing customer demands, changes in prevailing economic and political conditions, risks associated with the results of ongoing investigations into the Company's compliance with export regulations, risks associated with the Radyne acquisition, and other factors described in the Company's filings with the Securities and Exchange Commission.
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited) (Audited)
Three months ended Fiscal year ended
July 31, July 31,
------------------------- -------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Net sales $126,474,000 117,814,000 531,627,000 445,684,000
Cost of sales 68,869,000 65,319,000 296,687,000 252,389,000
------------ ------------ ------------ ------------
Gross profit 57,605,000 52,495,000 234,940,000 193,295,000
------------ ------------ ------------ ------------
Expenses:
Selling,
general and
administrative 22,232,000 19,842,000 85,967,000 73,312,000
Research and
development 10,039,000 9,646,000 40,472,000 32,469,000
Amortization of
intangibles 464,000 564,000 1,710,000 2,592,000
------------ ------------ ------------ ------------
32,735,000 30,052,000 128,149,000 108,373,000
------------ ------------ ------------ ------------
Operating income 24,870,000 22,443,000 106,791,000 84,922,000
Other expense
(income):
Interest
expense 668,000 679,000 2,683,000 2,731,000
Interest income
and other (2,443,000) (4,303,000) (14,065,000) (14,208,000)
------------ ------------ ------------ ------------
Income before
provision for
income taxes 26,645,000 26,067,000 118,173,000 96,399,000
Provision for
income taxes 9,680,000 8,980,000 41,740,000 31,186,000
------------ ----------- ----------- -----------
Net income $ 16,965,000 17,087,000 76,433,000 65,213,000
============ =========== ============ ===========
Net income per
share:
Basic $ 0.70 0.73 3.17 2.81
============ ============ ============ ============
Diluted $ 0.61 0.63 2.76 2.42
============ ============ ============ ============
Weighted average
number of common
shares
outstanding -
basic 24,306,000 23,508,000 24,138,000 23,178,000
============ ============ ============ ============
Weighted average
number of common
and common
equivalent
shares
outstanding
assuming
dilution -
diluted 28,381,000 27,979,000 28,278,000 27,603,000
============ ============ ============ ============
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
July 31,
---------------------------------
2008 2007
--------------- ---------------
Assets (Audited) (Audited)
Current assets:
Cash and cash equivalents $ 410,067,000 342,903,000
Accounts receivable, net 70,040,000 73,585,000
Inventories, net 85,966,000 61,987,000
Prepaid expenses and other
current assets 5,891,000 6,734,000
Deferred tax asset - current 10,026,000 9,380,000
--------------- ---------------
Total current assets 581,990,000 494,589,000
Property, plant and equipment, net 34,269,000 29,282,000
Goodwill 24,363,000 24,387,000
Intangibles with finite lives, net 7,505,000 5,717,000
Deferred financing costs, net 1,357,000 1,903,000
Other assets, net 3,636,000 464,000
--------------- ---------------
Total assets $ 653,120,000 556,342,000
=============== ===============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 31,423,000 26,137,000
Accrued expenses and other
current liabilities 49,671,000 47,332,000
Customer advances and deposits 15,287,000 20,056,000
Current installments of other
obligations 108,000 135,000
Interest payable 1,050,000 1,050,000
Income taxes payable -- 2,796,000
--------------- ---------------
Total current liabilities 97,539,000 97,506,000
Convertible senior notes 105,000,000 105,000,000
Other obligations, less current
installments -- 108,000
Income taxes payable - non-current 1,909,000 --
Deferred tax liability - non-current 5,870,000 7,960,000
--------------- ---------------
Total liabilities 210,318,000 210,574,000
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.10
per share; shares authorized and
unissued 2,000,000 -- --
Common stock, par value $.10 per
share; authorized 100,000,000
shares, issued 24,600,166 shares
and 24,016,329 shares at July 31,
2008 and 2007, respectively 2,460,000 2,402,000
Additional paid-in capital 186,246,000 165,703,000
Retained earnings 254,281,000 177,848,000
--------------- ---------------
442,987,000 345,953,000
Less:
Treasury stock
(210,937 shares) (185,000) (185,000)
--------------- ---------------
Total stockholders' equity 442,802,000 345,768,000
--------------- ---------------
Total liabilities and
stockholders' equity $ 653,120,000 556,342,000
=============== ===============
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to
GAAP Financial Measures
(Unaudited)
Three Months Ended Fiscal year Ended
July 31, July 31,
------------------------- ------------------------
2008 2007 2008 2007
------------ ------------ ----------- ------------
Reconciliation of
Non-GAAP Net
Income to
GAAP Net
Income(1):
Non-GAAP net
income $ 18,798,000 18,455,000 83,425,000 70,220,000
Amortization of
stock-based
compensation (2,790,000) (2,108,000) (10,640,000) (7,401,000)
Tax effect of
stock-based
compensation
expense 957,000 740,000 3,648,000 2,394,000
------------ ------------ ------------ ------------
GAAP net income $ 16,965,000 17,087,000 76,433,000 65,213,000
============ ============ ============ ============
Reconciliation of
Non-GAAP Diluted
Earnings Per
Share to GAAP
Diluted Earnings
Per Share(1),(2):
Non-GAAP diluted
earnings per
share $ 0.67 0.67 2.98 2.57
Amortization of
stock-based
compensation
(0.09) (0.06) (0.34) (0.22)
Tax effect of
stock-based
compensation
expense 0.03 0.02 0.12 0.07
------------ ------------ ----------- ------------
GAAP diluted
earnings per
share $ 0.61 0.63 2.76 2.42
============ ============ =========== ============
Reconciliation of
GAAP Net Income
to EBITDA(3):
GAAP net income $ 16,965,000 17,087,000 76,433,000 65,213,000
Income taxes 9,680,000 8,980,000 41,740,000 31,186,000
Net interest
income and
other (1,775,000) (3,624,000) (11,382,000) (11,477,000)
Amortization of
stock-based
compensation 2,790,000 2,108,000 10,640,000 7,401,000
Depreciation and
amortization 2,922,000 2,641,000 10,906,000 10,128,000
------------ ------------ ----------- ------------
EBITDA $ 30,582,000 27,192,000 128,337,000 102,451,000
============ ============ =========== ============
(1) Non-GAAP net income is used by management in assessing the
Company's operating results. The Company believes that investors
and analysts may use non-GAAP measures that exclude the
amortization of stock-based compensation, along with other
information contained in its SEC filings, in assessing the
Company's operating results.
(2) Earnings per share information for the full fiscal year may not
equal the total of the quarters within the year as a result of
rounding.
(3) Represents earnings before interest, income taxes, depreciation
and amortization of intangibles and stock-based compensation.
EBITDA is a non-GAAP operating metric used by management in
assessing the Company's operating results and ability to meet
debt service requirements. The Company's definition of EBITDA may
differ from the definition of EBITDA used by other companies and
may not be comparable to similarly titled measures used by other
companies. 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.
ECMTL