Exhibit 99.1 NEWS RELEASE Media Contacts: COMTECH TELECOMMUNICATIONS CORP. ANNOUNCES |
The Company has scheduled an investor conference call for 11:30 AM (ET) on Tuesday, December 9, 2003.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. Alternatively, investors can access the conference call by dialing (800) 227-9428 (domestic), or (785) 832-1508 (international) and using the conference I.D. of “Comtech.” A replay of the conference call will be available for seven days by dialing (402) 220-0668. In addition, an updated investor presentation, including updated earnings guidance, will be available on our web site shortly after the conference call. Certain information in this press release contains forward-looking statements, including but not limited to, information relating to 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 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: |
| • | Our operating results being difficult to forecast and subject to volatility; |
| • | Our inability to maintain our government business; |
| • | Our inability to keep pace with technological changes; |
| • | Our dependence on international sales; |
| • | The impact of a continued domestic and foreign economic slow-down and reduction in telecommunications equipment and systems spending on the demand for our products, systems and services; |
| • | Our mobile data communications business being in an early stage; |
| • | Our backlog being subject to cancellation or modification; |
| • | Our dependence on component availability, subcontractor availability and performance by key suppliers; |
| • | Our fixed price contracts being subject to risk; |
| • | The impact of adverse regulatory changes on our ability to sell products, systems and services; |
| • | The impact of prevailing economic and political conditions on our businesses; |
| • | Whether we can successfully integrate and assimilate the operations of acquired businesses; |
| • | The impact of the loss of key technical or management personnel; |
| • | The highly competitive nature of our markets; |
| • | Our inability to protect our proprietary technology; |
| • | Our operations being subject to environmental regulation; |
| • | The impact of recently enacted and proposed changes in securities laws and regulations on our costs; and |
| • | The impact of terrorist attacks and threats, and government responses thereto, and threats of war on our businesses. |
- Tables follow - |
COMTECH TELECOMMUNICATIONS CORP. |
| Three Months Ended October 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | |||||||
| Net sales | $ | 56,296,000 | 31,273,000 | |||||
| Cost of sales | 35,316,000 | 19,596,000 | ||||||
| Gross profit | 20,980,000 | 11,677,000 | ||||||
| Expenses: | ||||||||
| Selling, general and administrative | 8,574,000 | 6,328,000 | ||||||
| Research and development | 3,541,000 | 3,016,000 | ||||||
| Amortization of intangibles | 500,000 | 526,000 | ||||||
| 12,615,000 | 9,870,000 | |||||||
| Operating income | 8,365,000 | 1,807,000 | ||||||
| Other expense (income): | ||||||||
| Interest expense | 24,000 | 691,000 | ||||||
| Interest income | (105,000 | ) | (59,000 | ) | ||||
| Income before provision for income taxes | 8,446,000 | 1,175,000 | ||||||
| Provision for income taxes | 2,703,000 | 376,000 | ||||||
| Net income | $ | 5,743,000 | 799,000 | |||||
| Net income per share: | ||||||||
| Basic | $ | 0.41 | 0.07 | |||||
| Diluted | $ | 0.37 | 0.07 | |||||
| Weighted average number of common shares | ||||||||
| outstanding - basic computation | 13,953,000 | 11,265,000 | ||||||
| Potential dilutive common shares | 1,407,000 | 395,000 | ||||||
| Weighted average number of common and common equivalent shares | ||||||||
| outstanding assuming dilution - diluted computation | 15,360,000 | 11,660,000 | ||||||
| EBITDA (1) | $ | 9,927,000 | 3,346,000 | |||||
| Reconciliation of net income to EBITDA: | ||||||||
| Net income | $ | 5,743,000 | 799,000 | |||||
| Income taxes | 2,703,000 | 376,000 | ||||||
| Net interest expense (income) | (81,000 | ) | 632,000 | |||||
| Depreciation and amortization | 1,562,000 | 1,539,000 | ||||||
| EBITDA | $ | 9,927,000 | 3,346,000 | |||||
| (1) | Represents earnings before interest, income taxes, depreciation and amortization. EBITDA is a non-GAAP operating metric used by management in assessing the Company’s operating results and ability to meet debt service requirements. 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. |
COMTECH TELECOMMUNICATIONS CORP. |
| October 31, 2003 | July 31, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 49,604,000 | 48,617,000 | |||||
| Restricted cash | 4,280,000 | 4,288,000 | ||||||
| Accounts receivable, less allowance for doubtful accounts of $714,000 | ||||||||
| at October 31, 2003 and $912,000 at July 31, 2003 | 34,336,000 | 26,696,000 | ||||||
| Inventories, net | 33,517,000 | 34,048,000 | ||||||
| Prepaid expenses and other current assets | 2,198,000 | 1,742,000 | ||||||
| Deferred tax asset - current | 5,699,000 | 5,699,000 | ||||||
| Total current assets | 129,634,000 | 121,090,000 | ||||||
| Property, plant and equipment, net | 12,502,000 | 12,328,000 | ||||||
| Goodwill and other intangibles with indefinite lives, net | 17,726,000 | 17,726,000 | ||||||
| Intangibles with definite lives, net | 10,853,000 | 11,353,000 | ||||||
| Other assets, net | 378,000 | 390,000 | ||||||
| Deferred tax asset - non-current | 1,363,000 | 1,363,000 | ||||||
| Total assets | $ | 172,456,000 | 164,250,000 | |||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Current installments of capital lease obligations | $ | 706,000 | 899,000 | |||||
| Accounts payable | 13,296,000 | 11,527,000 | ||||||
| Accrued expenses and other current liabilities | 12,497,000 | 13,267,000 | ||||||
| Customer advances and deposits | 2,516,000 | 2,491,000 | ||||||
| Deferred service revenue | 11,279,000 | 11,160,000 | ||||||
| Income taxes payable | 7,614,000 | 6,945,000 | ||||||
| Total current liabilities | 47,908,000 | 46,289,000 | ||||||
| Capital lease obligations, less current installments | 320,000 | 393,000 | ||||||
| Total liabilities | 48,228,000 | 46,682,000 | ||||||
| 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 14,194,233 shares at October 31, 2003 and 14,020,769 shares | ||||||||
| at July 31, 2003 | 1,419,000 | 1,402,000 | ||||||
| Additional paid-in capital | 108,468,000 | 107,573,000 | ||||||
| Retained earnings | 14,627,000 | 8,884,000 | ||||||
| 124,514,000 | 117,859,000 | |||||||
| Less: | ||||||||
| Treasury stock (140,625 shares) | (185,000 | ) | (185,000 | ) | ||||
| Deferred compensation | (101,000 | ) | (106,000 | ) | ||||
| Total stockholders’ equity | 124,228,000 | 117,568,000 | ||||||
| Total liabilities and stockholders’ equity | $ | 172,456,000 | 164,250,000 | |||||
| Commitments and contingencies | ||||||||
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