Selected Fiscal 2012 Third Quarter Financial Metrics and Other Items
- Backlog as of April 30, 2012 was $137.4 million compared to $126.3 million as of January 31, 2012.
- Total bookings for the three and nine months ended April 30, 2012 were $110.9 million and $304.7 million, respectively, compared to $127.7 million and $330.2 million for the three and nine months ended April 30, 2011, respectively.
- Earnings before interest, taxes, depreciation and amortization (including amortization of intangibles and stock-based compensation) and costs related to a withdrawn fiscal 2011 contested proxy solicitation (“Adjusted EBITDA”) was $15.4 million and $54.6 million for the three and nine months ended April 30, 2012, respectively, as compared to $28.9 million and $107.7 million for the three and nine months ended April 30, 2011, respectively.
- The Company’s income tax provision for the three months ended April 30, 2012 reflects a net discrete tax benefit of $0.4 million. The Company’s effective income tax rate for the twelve months ending July 31, 2012 is expected to approximate 35.0%, excluding any discrete tax adjustments.
- At April 30, 2012, the Company had $367.6 million of cash and cash equivalents which does not reflect the subsequent (i) repurchase of an additional 433,892 shares of the Company’s common stock for an aggregate cost of approximately $13.0 million (including transaction costs) from May 1, 2012 through June 6, 2012; (ii) quarterly dividend payment of $5.1 million which was paid on May 22, 2012; or (iii) May 2012 collection of $10.0 million of intellectual property license fees from the U.S. Army.
- During the nine months ended April 30, 2012, the Company repurchased 6,054,022 shares of its common stock at an aggregate cost of approximately $188.1 million (including transaction costs). From May 1, 2012 through June 6, 2012, the Company repurchased an additional 433,892 shares at an aggregate cost of approximately $13.0 million (including transaction costs). Since the establishment of the Company’s repurchase programs, it has purchased a total of 10,785,422 shares of common stock for approximately $322.7 million (including transaction costs). The Company can make additional repurchases of up to $27.6 million pursuant to its existing $250.0 million repurchase program.
- During the three months ended April 30, 2012, the Company paid $5.4 million of cash dividends to its stockholders.
- Additional information about the Company’s updated fiscal 2012 guidance is contained in the Company’s Third Quarter investor presentation which is located on the Company’s website at www.comtechtel.com.
Cautionary Statement Regarding Forward-Looking StatementsCertain 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, and 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 its 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 nature and timing of receipt of, and the Company’s performance on, new or existing 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 Company’s legal proceedings and other matters; risks associated with the Company’s BFT-1 contract, including its ongoing negotiations with the U.S. Army regarding pricing for the engineering services, program management and satellite network operations under its sustainment contract awarded in March 2012, and the post-award audit of its BFT-1 contract; risks associated with the Company’s obligations under its revolving credit facility; and other factors described in the Company’s filings with the Securities and Exchange Commission (“SEC”).
|COMTECH TELECOMMUNICATIONS CORP.|
|Condensed Consolidated Statements of Operations|
|Three months ended April 30,||Nine months ended April 30,|
|Cost of sales||58,115,000||74,110,000||177,921,000||289,937,000|
|Selling, general and administrative||20,005,000||22,552,000||63,749,000||69,742,000|
|Research and development||9,481,000||10,328,000||28,609,000||31,546,000|
|Amortization of intangibles||1,626,000||2,173,000||5,037,000||6,064,000|
|Merger termination fee, net||-||-||-||(12,500,000||)|
|Other expenses (income):|
|Interest income and other||(370,000||)||(557,000||)||(1,300,000||)||(1,877,000||)|
|Income before provision for income taxes||8,744,000||20,340,000||31,758,000||82,852,000|
|Provision for income taxes||2,678,000||6,085,000||7,270,000||26,845,000|
|Net income per share:|
|Weighted average number of common shares outstanding – basic||18,853,000||26,577,000||20,746,000||27,310,000|
|Weighted average number of common and common equivalent shares outstanding – diluted||24,910,000||32,378,000||26,724,000||33,069,000|
|Dividends declared per issued and outstanding common share as of the applicable dividend record date||$||0.275||0.25||0.825||0.75|
|COMTECH TELECOMMUNICATIONS CORP.|
|Condensed Consolidated Balance Sheets|
|April 30, 2012||July 31, 2011|
|Cash and cash equivalents||$||367,649,000||558,804,000|
|Accounts receivable, net||73,009,000||70,801,000|
|Prepaid expenses and other current assets||10,248,000||7,270,000|
|Deferred tax asset, net||12,983,000||11,529,000|
|Total current assets||540,553,000||723,065,000|
|Property, plant and equipment, net||23,879,000||26,638,000|
|Intangibles with finite lives, net||40,433,000||45,470,000|
|Deferred financing costs, net||2,947,000||3,823,000|
|Other assets, net||1,194,000||1,159,000|
|Liabilities and Stockholders’ Equity|
|Accrued expenses and other current liabilities||38,505,000||49,858,000|
|Customer advances and deposits||17,151,000||11,011,000|
|Income taxes payable||-||4,056,000|
|Total current liabilities||82,134,000||96,057,000|
|Convertible senior notes||200,000,000||200,000,000|
|Income taxes payable||3,297,000||3,811,000|
|Deferred tax liability||1,041,000||2,101,000|
|Commitments and contingencies|
|Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000||-||-|
|Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 28,905,281 shares and 28,731,265 shares at April 30, 2012 and July 31, 2011, respectively||2,891,000||2,873,000|
|Additional paid-in capital||360,208,000||355,001,000|
|Treasury stock, at cost (10,562,467 shares and 4,508,445 shares at April 30, 2012 and July 31, 2011, respectively)||(309,864,000||)||(121,803,000||)|
|Total stockholders’ equity||454,307,000||629,180,000|
|Total liabilities and stockholders’ equity||$||746,360,000||937,509,000|
|COMTECH TELECOMMUNICATIONS CORP.|
|Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures|
|Three Months Ended April 30,||Nine months Ended April 30,|
|Reconciliation of GAAP Net Income to Adjusted EBITDA (1) :|
|GAAP net income||$||6,066,000||14,255,000||24,488,000||56,007,000|
|Net interest expense and other||1,822,000||1,578,000||5,221,000||4,411,000|
|Amortization of stock-based compensation||809,000||1,118,000||2,718,000||3,977,000|
|Depreciation and other amortization||4,064,000||5,905,000||12,256,000||16,416,000|
|Costs related to withdrawn fiscal 2011 contested proxy solicitation||-||-||2,638,000||-|
|(1)||Represents earnings before interest, income taxes, depreciation and amortization of intangibles, stock-based compensation and costs related to a withdrawn fiscal 2011 contested proxy solicitation. Adjusted EBITDA is a non-GAAP operating metric used by management in assessing the Company’s operating results. The Company’s definition of Adjusted 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. Adjusted EBITDA is also a measure frequently requested by the Company’s investors and analysts. The Company believes that investors and analysts may use Adjusted EBITDA, along with other information contained in its SEC filings, in assessing its ability to generate cash flow and service debt.|