Comtech Telecommunications Corp. Announces Second Quarter Results for Fiscal 2002.Business and Technology Editors MELVILLE, N.Y.--(BUSINESS WIRE)--March 13, 2002 Comtech Comtech Computer Technology Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CMTL CMTL Chief Military Training Leader CMTL Center for Mathematics, Teaching and Learning ) today reported its results for the three months ended January January: see month. 31, 2002. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the three months ended January 31, 2002 were $30.5 million compared to $33.1 million for the three months ended January 31, 2001. Sales for the three months ended January 31, 2002 were impacted by the current softness in the telecommunications market. Net income was $.1 million, or $.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, and $1.9 million, or $.24 per diluted share, for the three month periods ended January 31, 2002 and 2001, respectively. The decrease in net income was driven primarily by the reduction in sales volume. Net sales for the six months ended January 31, 2002 were $61.6 million compared to $73.0 million for the six months ended January 31, 2001. Net income was $1.1 million, or $.13 per diluted share, and $3.9 million, or $.49 per diluted share, for the six months ended January 31, 2002 and 2001, respectively. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. as of January 31, 2002 was $49.0 million compared to $43.2 million as of October October: see month. 31, 2001 and $50.1 million as of July July: see month. 31, 2001. Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. Kornberg Korn·berg , Arthur Born 1918. American biochemist. He shared a 1959 Nobel Prize for work on the biological synthesis of nucleic acids. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , observed, "All three of our business segments were profitable despite the extremely challenging economic environment we are operating in. We also generated very strong cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses during the quarter." Mr. Kornberg added, "We have maintained our R&D spending despite the continued softness in sales. This is further evidence of our commitment to the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. future of the Company through development of new products and enhancement of existing products." Mr. Kornberg concluded, "Our balance sheet remains very strong. Our next long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. payment is not due until December December: see month. 2003. We also increased our cash position while reducing inventory and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying during the quarter." Comtech Telecommunications Corp. (www.comtechtel.com) is an innovative player in domestic and global high-technology markets. Through its operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , Comtech pursues opportunities in three interrelated in·ter·re·late tr. & intr.v. in·ter·re·lat·ed, in·ter·re·lat·ing, in·ter·re·lates To place in or come into mutual relationship. in market segments: telecommunications transmission, RF microwave microwave, electromagnetic wave having a frequency range from 1,000 megahertz (MHz) to 300,000 MHz, corresponding to a wavelength range from 300 mm (about 12 in.) to 1 mm (about 0.04 in.). Like light waves, microwaves travel essentially in straight lines. amplifiers, and mobile data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. 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 Dealing with the earth. See terrestrial link. line of sight and other wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. systems. More than 275 distinct Comtech products are in service in more than 100 countries. The Company has scheduled an investor conference call for 11:30 a.m. Eastern Standard Time on Wednesday Wednesday: see week. , March 13, 2002. Investors and the public are invited to access a live webcast of the conference call from the news section of the Comtech web site, www.comtechtel.com. A replay of the webcast will be available at the same location for 30 days following the conference call. Certain information in this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including but not limited to, information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. The Company's Securities and Exchange Commission filings identify many such risks and uncertainties, which include the following:
- the impact of a continued domestic and foreign economic
slow-down on the demand for our products and services,
particularly in the telecommunications industry;
- risks associated with our mobile data communications business
being in a developmental stage;
- our potential inability to keep pace with rapid technological
changes;
- our backlog being subject to customer cancellation or
modification;
- our sales to the U.S. government being subject to funding,
deployment and other risks;
- our fixed price contracts being subject to risks;
- our dependence on component availability, subcontractor
availability and performance by key suppliers;
- the highly competitive nature of our markets;
- our dependence on international sales;
- the adverse effect on demand for our products and services
that would be caused by a decrease in the value of foreign
currencies relative to the U.S. dollar;
- the potential entry of new competitors in the mobile data
communications industry;
- uncertainty whether the satellite communications industry or
infrastructure will continue to develop and the market will
grow;
- uncertainty whether the Internet will continue to grow in
international markets;
- the potential impact of increased competition on prices,
profit margins and market share for the Company's products and
services;
- the availability of satellite capacity on a leased basis
needed to provide the necessary global coverage for our mobile
data communications services;
- whether we can successfully implement our satellite mobile
data communications services and achieve recurring revenues
for such services; and
- whether we can successfully combine and assimilate the
operations of acquired businesses and product lines.
COMTECH TELECOMMUNICATIONS CORP.
Consolidated Statements of Operations
(Unaudited )
Three Months Ended Six Months Ended
January 31, January 31,
----------------------- ----------------------
2002 2001 2002 2001
------------ ---------- ---------- -----------
Net sales $ 30,525,000 33,111,000 61,570,000 72,957,000
Cost of sales 21,406,000 20,455,000 41,646,000 47,193,000
------------ ---------- ---------- -----------
Gross profit 9,119,000 12,656,000 19,924,000 25,764,000
------------ ---------- ---------- -----------
Operating expenses:
Selling, general
and administrative 5,304,000 6,217,000 10,877,000 12,384,000
Research and development 2,712,000 2,618,000 5,360,000 5,416,000
Amortization
of intangibles 370,000 579,000 731,000 1,172,000
----------- ---------- ---------- -----------
Total
operating expenses 8,386,000 9,414,000 16,968,000 18,972,000
----------- ---------- ---------- -----------
Operating income 733,000 3,242,000 2,956,000 6,792,000
Other (income) expense:
Interest expense 690,000 920,000 1,663,000 1,878,000
Interest income (98,000) (812,000) (280,000) (1,406,000)
Other, net ----------- ---------- ---------- -----------
(7,000) (92,000) (7,000) (92,000)
----------- ---------- ---------- -----------
Income before provision
for income taxes 148,000 3,226,000 1,580,000 6,412,000
Provision
for income taxes - 1,354,000 530,000 2,533,000
----------- ---------- ---------- -----------
Net income $ 148,000 1,872,000 1,050,000 3,879,000
----------- ---------- ---------- -----------
Basic income per share $ 0.02 0.26 0.14 0.53
Diluted income per share $ 0.02 0.24 0.13 0.49
Weighted average number
of common shares
outstanding-
basic computation 7,440,000 7,309,000 7,439,000 7,289,000
Potential dilutive
common shares 453,000 546,000 499,000 572,000
----------- ---------- ---------- -----------
Weighted average number
of common and common
equivalent shares
outstanding
assuming dilution
- diluted computation 7,893,000 7,855,000 7,938,000 7,861,000
----------- ---------- ---------- -----------
EBITDA (1) $ 2,037,000 4,838,000 5,602,000 10,146,000
----------- ---------- ---------- -----------
(1) Earnings before interest, taxes, depreciation and amortization.
COMTECH TELECOMMUNICATIONS CORP.
Consolidated Balance Sheets
January 31, July 31,
2002 2001
(Unaudited) (Audited)
------------ -----------
Assets
Current assets:
Cash and cash equivalents $ 21,354,000 36,205,000
Accounts receivable, net 26,742,000 27,374,000
Inventories, net 32,026,000 36,732,000
Prepaid expenses and other current assets 673,000 1,151,000
Deferred tax asset - current 2,634,000 2,634,000
------------ -----------
Total current assets 83,429,000 104,096,000
Property, plant and equipment, net 11,715,000 11,778,000
Intangible assets, net 27,193,000 27,819,000
Other assets 365,000 569,000
Deferred tax asset - non current 2,726,000 2,726,000
------------ -----------
Total assets 125,428,000 146,988,000
============ ===========
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ - 5,900,000
Current installments
of capital lease obligations 1,021,000 1,097,000
Accounts payable 7,964,000 11,014,000
Accrued expenses
and other current liabilities 12,154,000 13,615,000
Deferred service revenue 3,092,000 2,073,000
Income taxes payable 3,600,000 3,308,000
------------ -----------
Total current liabilities 27,831,000 37,007,000
Long-term debt, less current installments 28,683,000 42,000,000
Capital lease obligations,
less current installments 1,820,000 2,157,000
Other long-term liabilities 205,000 259,000
------------ -----------
Total liabilities 58,539,000 81,423,000
Stockholders' equity:
Preferred stock, par value $.10 per share;
shares authorized and unissued 2,000,000 - -
Common stock, par value $.10 per share;
authorized 30,000,000 shares, issued
7,551,538 shares at January 31, 2002
and 7,511,105 shares at July 31, 2001 755,000 751,000
Additional paid-in capital 67,729,000 67,490,000
Accumulated deficit (923,000) (1,973,000)
------------ -----------
67,561,000 66,268,000
Less:
Treasury stock (93,750 shares at January
31, 2002 and 82,500 at July 31, 2001) (237,000) (184,000)
Deferred compensation (435,000) (519,000)
------------ -----------
Total stockholders' equity 66,889,000 65,565,000
------------ -----------
Total liabilities and stockholders' equity $125,428,000 146,988,000
============ ===========
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