MELVILLE, N.Y., June 3, 2009 (GLOBE NEWSWIRE) -- Comtech Telecommunications Corp. (Nasdaq:CMTL) today reported its operating results for the three and nine months ended April 30, 2009.
Net sales for the third quarter of fiscal 2009 were $128.5 million compared to $138.1 million for the third quarter of fiscal 2008, reflecting growth in both our telecommunications transmission and our RF microwave amplifiers segments, all of which was offset by a significant decrease of sales in our mobile data communications segment. The anticipated decline in sales in our mobile data communications segment is attributable to the fact that a large majority of our current record backlog is expected to ship in fiscal 2010. All three of our business segments benefited from incremental sales associated with our Radyne acquisition.
GAAP net income was $8.2 million, or $0.29 per diluted share, for the three months ended April 30, 2009 compared to $19.3 million, or $0.70 per diluted share, for the three months ended April 30, 2008. Non-GAAP net income for the three months ended April 30, 2009, which excludes the amortization of stock-based compensation expense, was $9.8 million, or $0.34 per diluted share, as compared to Non-GAAP net income of $21.0 million, or $0.76 per diluted share, for the three months ended April 30, 2008.
Net sales for the nine months ended April 30, 2009 were $464.3 million compared to $405.2 million for the nine months ended April 30, 2008. GAAP net income was $43.4 million, or $1.55 per diluted share, for the nine months ended April 30, 2009 compared to $59.5 million, or $2.15 per diluted share, for the nine months ended April 30, 2008. GAAP net income for the nine months ended April 30, 2009 has been reduced by a one-time charge of $6.2 million ($0.22 per diluted share) for the amortization of acquired in-process research and development associated with the Radyne acquisition. Non-GAAP net income for the nine months ended April 30, 2009, which excludes the amortization of stock-based compensation expense and amortization of acquired in-process research and development, was $54.3 million, or $1.93 per diluted share, as compared to Non-GAAP net income of $64.6 million, or $2.31 per diluted share, for the nine months ended April 30, 2008.
In commenting on the Company's performance during the third quarter of fiscal 2009, Fred Kornberg, President and Chief Executive Officer, stated, "Although we have not been immune to challenging market conditions, we are seeing early signs of end-market stabilization and improved order flow. Our performance during this quarter demonstrates our market leadership positions. We continue to anticipate record sales in fiscal 2009 even though our fourth quarter of fiscal 2009 results are expected to be impacted by short-term delivery delays by the supplier of our new MTS computers. These computers are now expected to begin shipping in fiscal 2010."
Mr. Kornberg added, "With record backlog of $591.1 million and deployable cash of $449.2 million, I am increasingly optimistic that fiscal 2010 will be a strong year for Comtech, and believe that we are well-positioned to navigate through the most challenging global economy in decades. We continue to be focused on both executing our business strategies and continuing to position ourselves for additional growth when the economy recovers."
Selected Fiscal 2009 Third Quarter Financial Metrics and Other Items
* Backlog as of April 30, 2009 is a record $591.1 million compared to
$201.1 million as of July 31, 2008 and $185.9 million as of April
30, 2008. Bookings for the three months ended April 30, 2009 were
$257.5 million, and for the nine months ended April 30, 2009 were a
record of $803.0 million compared to $104.8 million and $462.1
million for the three and nine months ended April 30, 2008,
respectively.
* Earnings before interest, taxes, depreciation and amortization,
including amortization of acquired in-process research and
development ("EBITDA"), were $18.4 million and $95.5 million for
the three and nine months ended April 30, 2009, respectively,
versus $33.2 million and $97.8 million for the three and nine
months ended April 30, 2008, respectively.
* As of April 30, 2009, the Company had $255.2 million of cash and
cash equivalents. Net cash provided by operating activities was
$49.6 million for the nine months ended April 30, 2009 compared to
$22.1 million for the nine months ended April 30, 2008. The net
increase in cash provided by operating activities was primarily
driven by a significant decrease in net working capital
requirements during the nine months ended April 30, 2009 as
compared to the nine months ended April 30, 2008.
* On May 8, 2009, the Company received net proceeds of $194.0 million
related to the issuance of $200.0 million of 3.0% convertible
senior notes. As a result, the Company has approximately $449.2
million of cash entering the fourth quarter of fiscal 2009. All of
the Company's previously issued $105.0 million 2.0% convertible
senior notes were fully converted by noteholders as of February 12,
2009 into an aggregate of 3,333,327 shares of the Company's common
stock, plus cash in lieu of fractional shares.
* Our provision for income taxes for three months ended April 30,
2009 includes a benefit of $0.3 million due to a change in our
estimated fiscal 2009 effective tax rate and discrete tax benefits
of $0.2 million.
Conference Call
The Company has scheduled an investor conference call for 8:30 AM (ET) on Thursday, June 4, 2009. Investors and the public are invited to access a live webcast of the conference call from the investor relations section of the Comtech web site at www.comtechtel.com. Alternatively, investors can access the conference call by dialing (800) 862-9098 (domestic) or (785) 424-1051 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (402) 220-7227. 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 our future performance and financial condition, plans and objectives of the Company's management and the Company's assumptions regarding such future performance, financial condition, and 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 nature and 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, risks associated with the Department of Defense subpoenas, risks associated with our recent MTS orders, and other factors described in the Company's filings with the Securities and Exchange Commission.
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended Nine months ended
April 30, April 30,
--------------------------- ---------------------------
2009 2008 2009 2008
------------- ------------- ------------- -------------
Net sales $128,545,000 138,068,000 464,346,000 405,153,000
Cost of sales 81,040,000 77,536,000 270,385,000 227,818,000
------------- ------------- ------------- -------------
Gross profit 47,505,000 60,532,000 193,961,000 177,335,000
------------- ------------- ------------- -------------
Expenses:
Selling,
general and
administra-
tive 23,062,000 22,032,000 78,009,000 63,735,000
Research and
development 11,410,000 10,252,000 38,057,000 30,433,000
Amortization
of acquired
in-process
research
and develo-
pment -- -- 6,200,000 --
Amortization
of intangi-
bles 1,805,000 433,000 5,394,000 1,246,000
------------- ------------- ------------- -------------
36,277,000 32,717,000 127,660,000 95,414,000
------------- ------------- ------------- -------------
Operating
income 11,228,000 27,815,000 66,301,000 81,921,000
Other expenses
(income):
Interest
expense 41,000 668,000 1,418,000 2,015,000
Interest
income and
other (404,000) (3,080,000) (2,307,000) (11,622,000)
------------- ------------- ------------- -------------
Income before
provision for
income taxes 11,591,000 30,227,000 67,190,000 91,528,000
Provision for
income taxes 3,422,000 10,922,000 23,810,000 32,060,000
------------- ------------- ------------- -------------
Net income $ 8,169,000 19,305,000 43,380,000 59,468,000
============= ============= ============= =============
Net income per
share:
Basic $ 0.29 0.80 1.69 2.47
============= ============= ============= =============
Diluted $ 0.29 0.70 1.55 2.15
============= ============= ============= =============
Weighted
average
number of
common shares
outstanding -
basic 27,779,000 24,224,000 25,708,000 24,082,000
============= ============= ============= =============
Weighted
average
number of
common and
common equi-
valent shares
outstanding
assuming
dilution -
diluted 28,452,000 28,220,000 28,540,000 28,244,000
============= ============= ============= =============
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
April 30, July 31,
2009 2008
------------- -------------
Assets (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $255,180,000 410,067,000
Accounts receivable, net 87,602,000 70,040,000
Inventories, net 102,069,000 85,966,000
Prepaid expenses and other current
assets 18,882,000 5,891,000
Deferred tax asset 16,808,000 10,026,000
------------- -------------
Total current assets 480,541,000 581,990,000
Property, plant and equipment, net 38,968,000 34,269,000
Goodwill 147,134,000 24,363,000
Intangibles with finite lives, net 57,470,000 7,505,000
Deferred financing costs, net -- 1,357,000
Other assets, net 598,000 3,636,000
------------- -------------
Total assets $724,711,000 653,120,000
============= =============
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $ 20,173,000 31,423,000
Accrued expenses and other current
liabilities 49,303,000 49,671,000
Customer advances and deposits 16,487,000 15,287,000
Current installments of other
obligations -- 108,000
Interest payable -- 1,050,000
------------- -------------
Total current liabilities 85,963,000 97,539,000
Convertible senior notes -- 105,000,000
Other liabilities 2,211,000 --
Income taxes payable 3,532,000 1,909,000
Deferred tax liability 12,641,000 5,870,000
------------- -------------
Total liabilities 104,347,000 210,318,000
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
28,363,156 shares and 24,600,166 shares
at April 30, 2009 and July 31, 2008,
respectively 2,836,000 2,460,000
Additional paid-in capital 320,052,000 186,246,000
Retained earnings 297,661,000 254,281,000
------------- -------------
620,549,000 442,987,000
Less:
Treasury stock (210,937 shares) (185,000) (185,000)
------------- -------------
Total stockholders' equity 620,364,000 442,802,000
------------- -------------
Total liabilities and
stockholders' equity $724,711,000 653,120,000
============= =============
COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures
(Unaudited)
Three Months Ended Nine months Ended
April 30, April 30,
--------------------------- ---------------------------
2009 2008 2009 2008
------------- ------------- ------------- -------------
Reconciliation
of Non-GAAP
Net Income to
GAAP Net
Income(1):
Non-GAAP net
income $ 9,761,000 21,022,000 54,262,000 64,627,000
Amortization
of acquired
in-process
research
and develo-
pment -- -- (6,200,000) --
Amortization
of stock-
based com-
pensation (2,339,000) (2,579,000) (7,049,000) (7,850,000)
Tax effect
of stock-
based com-
pensation
expense 747,000 862,000 2,367,000 2,691,000
------------- ------------- ------------- -------------
GAAP net
income $ 8,169,000 19,305,000 43,380,000 59,468,000
============= ============= ============= =============
Reconciliation
of Non-GAAP
Diluted
Earnings Per
Share to GAAP
Diluted
Earnings Per
Share(1):
Non-GAAP
diluted
earnings
per share $ 0.34 0.76 1.93 2.31
Amortization
of acquired
in-process
research
and develo-
pment -- -- (0.22) --
Amortization
of stock-
based com-
pensation (0.08) (0.09) (0.24) (0.25)
Tax effect
of stock-
based com-
pensation
expense 0.03 0.03 0.08 0.09
------------- ------------- ------------- -------------
GAAP diluted
earnings
per share $ 0.29 0.70 1.55 2.15
============= ============= ============= =============
Reconciliation
of GAAP Net
Income to
EBITDA(2):
GAAP net
income $ 8,169,000 19,305,000 43,380,000 59,468,000
Income taxes 3,422,000 10,922,000 23,810,000 32,060,000
Net interest
expense
(income)
and other (363,000) (2,412,000) (889,000) (9,607,000)
Amortization
of acquired
in-process
research
and develo-
pment -- -- 6,200,000 --
Amortization
of stock-
based com-
pensation 2,339,000 2,579,000 7,049,000 7,850,000
Depreciation
and other
amortiza-
tion 4,856,000 2,800,000 15,930,000 7,984,000
------------- ------------- ------------- -------------
EBITDA $ 18,423,000 33,194,000 95,480,000 97,755,000
============= ============= ============= =============
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 acquired in-process research and development and
stock-based compensation, along with other information contained
in its SEC filings, in assessing the Company's operating results.
2) Represents earnings before interest, income taxes, depreciation
and amortization of intangibles, stock-based compensation and
acquired in-process research and development. 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