Comtech Telecommunications Corp. Announces Results for the Third Quarter of Fiscal 2007.

MELVILLE, N.Y. -- Comtech Telecommunications Corp. (NASDAQ: CMTL) today reported its operating results for the three months ended April 30, 2007. Net sales for the third quarter of fiscal 2007 were $119.4 million compared to $89.0 million for the third quarter of fiscal 2006, reflecting growth in the telecommunications transmission and mobile data communications segments, partially offset by lower sales, as anticipated, in the RF microwave amplifiers segment.

GAAP net income was $19.1 million, or $0.71 per diluted share, for the three months ended April 30, 2007 compared to $8.7 million, or $0.33 per diluted share, for the three months ended April 30, 2006. Non-GAAP net income, which excludes the amortization of stock-based compensation expense, was $20.5 million, or $0.75 per diluted share, for the three months ended April 30, 2007 as compared to Non-GAAP net income of $9.7 million, or $0.37 per diluted share, for the three months ended April 30, 2006.

Net sales for the nine months ended April 30, 2007 were $327.9 million, compared to $291.3 million for the nine months ended April 30, 2006. GAAP net income was $48.1 million, or $1.80 per diluted share, for the nine months ended April 30, 2007 compared to $33.5 million, or $1.27 per diluted share, for the nine months ended April 30, 2006. Non-GAAP net income, which excludes the amortization of stock-based compensation expense, was $51.8 million, or $1.90 per diluted share, for the nine months ended April 30, 2007 as compared to Non-GAAP net income of $36.7 million, or $1.38 per diluted share, for the nine months ended April 30, 2006.

In commenting on the Company's performance during the third quarter of fiscal 2007, Fred Kornberg, President and Chief Executive Officer, noted, "The third quarter was yet another strong showing in a sustained period of outstanding performance by Comtech. Virtually all of our growth has been organic and driven by our significant investments in technology and research and development which have translated into well-entrenched leadership positions in high growth markets and participation in high growth programs."

Mr. Kornberg concluded, "Anchored by our strong performance during the first nine months, fiscal 2007 is expected to be another record year for us, on the top and bottom lines, by a wide margin. We are excited about the many large growth opportunities we see as we look to fiscal 2008 and beyond."

Selected Third Quarter Fiscal 2007 Financial Metrics and Other Items

* Bookings for the three and nine months ended April 30, 2007 were $68.9 million and $294.9 million, respectively, compared to $76.3 million and $276.3 million for the three and nine months ended April 30, 2006, respectively. Backlog as of April 30, 2007 was $153.0 million compared to $203.5 million as of January 31, 2007 and $186.0 million as of July 31, 2006.

* Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $28.7 million and $75.3 million for the three and nine months ended April 30, 2007, respectively, versus $15.6 million and $58.0 million for the three and nine months ended April 30, 2006, respectively.

* Cash provided by operating activities for the first nine months of fiscal 2007 was $65.4 million compared to $9.3 million for the first nine months of fiscal 2006, reflecting an increase in net income and cash collected from customers (including advanced payments received), partially offset by the timing of payments for accounts payable and a decrease in deferred service revenue.

* In our mobile data communications segment, during the three months ended April 30, 2007, we increased the estimated gross profit at completion on the MTS contract, which resulted in an increase to net sales and operating income of $4.6 million and $3.9 million, respectively. This adjustment is more fully described in our Form 10-Q filed earlier today.

* Our effective tax rate of 29.0% in the third quarter of fiscal 2007 reflects (i) the passage of legislation, in fiscal 2007, extending the Federal research and experimentation credit; (ii) the approval by our stockholders of an amendment to the 2000 Stock Incentive Plan (the "Plan") which will permit us to claim tax deductions for cash awards anticipated to be paid under the Plan without limitation under SS162(m) of the Internal Revenue Code; (iii) a $1.0 million reduction of income tax reserves that we determined were no longer needed due to the expiration of applicable statutes of limitations; and (iv) $0.6 million of tax benefits primarily associated with an adjustment relating to the differences between the estimates used in the computation of the fiscal 2006 income tax provision and the actual amounts reported in the fiscal 2006 income tax returns. We estimate that our effective tax rate for fiscal 2007, excluding adjustments, will approximate 35.0%.

* Amortization of stock-based compensation expense for the three months ended April 30, 2007 and 2006 was $1.9 million and $1.4 million, respectively. Amortization of stock-based compensation expense for the nine months ended April 30, 2007 and 2006 was $5.3 million and $4.2 million, respectively.

Conference Call

The Company has scheduled an investor conference call for 8:30 AM (ET) on Thursday, June 7, 2007. 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 [phone] (domestic) or [phone] (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing [phone]. 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, and other factors described in the Company's filings with the Securities and Exchange Commission.

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