December 6, 2012 --Comtech Telecommunications Corp. (NASDAQ: CMTL) today reported its operating results for the first quarter ended October 31, 2012.
Net sales for the first quarter of fiscal 2013 were $91.0 million compared to $113.4 million for the first quarter of fiscal 2012. The period-over-period decrease in net sales is primarily due to lower net sales, as expected, in the Company’s mobile data communications segment.
GAAP net income was $7.4 million, or $0.36 per diluted share, for the first quarter of fiscal 2013 as compared to $12.6 million, or $0.47 per diluted share, for the first quarter of fiscal 2012.
Adjusted EBITDA was $18.5 million for the first quarter of fiscal 2013, as compared to $23.4 million for the comparative period in fiscal 2012.The Company also provided updated fiscal 2013 guidance. Fiscal 2013 revenue is now expected to range from $350.0 million to $365.0 million and GAAP diluted earnings per share is now expected to be between $1.26 and $1.34. Adjusted EBITDA for fiscal 2013 is now expected to be in the range of $65.0 million to $68.0 million. In commenting on the Company’s performance and business outlook, Fred Kornberg, President and Chief Executive Officer, stated, “Despite difficult market conditions, we are pleased with our first quarter results and the strong cash flows generated from our business.” Mr. Kornberg added, “Although our long term growth plans have not changed, we believe that the U.S. government’s failure to resolve the “fiscal cliff” has resulted in increased uncertainty throughout our customer base. As such, we have adjusted our fiscal 2013 business outlook and updated our guidance accordingly.” Selected Fiscal 2013 First Quarter Financial Metrics and Other Items
- Backlog as of October 31, 2012 was $133.3 million compared to $153.9 million as of July 31, 2012.
- Total bookings for the three months ended October 31, 2012 were $70.4 million compared to $95.4 million for the three months ended October 31, 2011.
- The Company’s first quarter results for fiscal 2013 include a pre-tax benefit of $2.4 million related to a change in fair value of the earn-out liability associated with the Company’s acquisition of Stampede Technologies, Inc., and also include a pre-tax net charge of $0.8 million related to a restructuring plan to wind-down the microsatellite product line of the Company’s mobile data communications segment.
- The Company’s first quarter results for fiscal 2012 included a pre-tax benefit of $5.6 million associated with the finalization of pricing and the related increased funding award for certain U.S. Army Movement Tracking System (“MTS”) and Blue Force Tracking-1 (“BFT-1”) orders and also included a pre-tax expense of $2.6 million associated with costs related to a withdrawn fiscal 2011 contested proxy solicitation.
- Adjusted EBITDA was $18.5 million for the three months ended October 31, 2012, as compared to $23.4 million for the three months ended October 31, 2011. Adjusted EBITDA is a Non-GAAP financial measure and is defined in the below table.
- The Company’s effective income tax rate in the first quarter of fiscal 2013 was 35.5%, and does not include any benefit associated with the federal research and experimentation credit which expired on December 31, 2011. The Company’s effective income tax rate for the twelve months ending July 31, 2013 is expected to approximate 35.5%, excluding any potential discrete tax adjustments. The increase in the Company’s estimated fiscal 2013 effective tax rate as compared to the Company’s previously expected rate of 34.5% is principally attributable to expected product and geographical mix changes in its updated fiscal 2013 business outlook.
- At October 31, 2012, the Company had $374.5 million of cash and cash equivalents, which does not reflect a quarterly dividend payment of $4.8 million that was paid on November 20, 2012.
- As separately announced today, the Company’s Board of Directors authorized a new $50.0 million stock repurchase program, which will be effective upon the completion of the Company’s current $250.0 million stock repurchase program, of which $11.3 million remains available for stock repurchases. Together with the new $50.0 million stock repurchase program, the Company is authorized to repurchase up to an additional $61.3 million of its common stock.
- The Company does not normally provide quarterly guidance. However, since second quarter sales and earnings per share are expected to be significantly lower compared to the other quarters in fiscal 2013, the Company notes that (i) sales in the second quarter of fiscal 2013 are expected to be approximately 15.0% lower than first quarter sales and (ii) diluted GAAP earnings per share for the second quarter are expected to be between $0.10 and $0.12.
- Additional information about the Company’s updated fiscal 2013 guidance is contained in the Company’s first quarter investor presentation which is located on the Company’s website at www.comtechtel.com.
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