Comtech Telecommunications (CMTL) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Media Contacts:

Michael D. Porcelain, Senior Vice President and Chief Financial Officer

Jerome Kapelus, Senior Vice President, Strategy and Business Development

(631) 962-7000

Info@comtechtel.com

COMTECH TELECOMMUNICATIONS CORP. ANNOUNCES

RESULTS FOR FISCAL 2008 FOURTH QUARTER AND FULL YEAR

Melville, New York – September 17, 2008 – 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."

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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.

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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.

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COMTECH TELECOMMUNICATIONS CORP.

AND SUBSIDIARIES

Consolidated Statements of Operations

	(Unaudited)						(Audited)
	Three months ended July 31,						Fiscal year ended 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

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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

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COMTECH TELECOMMUNICATIONS CORP.

AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

(Unaudited)

	Three Months Ended July 31,						Fiscal year Ended 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

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