Comtech Telecommunications Corp. Announces Results for Fiscal 2018 Third Quarter and Updates Its Fiscal 2018 Guidance

MELVILLE, N.Y. –
June 6, 2018– Comtech Telecommunications Corp. (NASDAQ: CMTL) today
reported its operating results for the third fiscal quarter ended
April 30, 2018 and updated its fiscal 2018 guidance.

Fiscal 2018 Third Quarter Highlights

  • Net sales were $147.9 million.
  • Bookings were $164.3 million, with a book-to-bill ratio (a measure
    defined as bookings divided by net sales) of 1.11.
  • Backlog increased from the level reported as of the second quarter of
    fiscal 2018 and is a near record $583.7 million. This amount does not
    include the portions of multi-year contracts that have not been
    funded. As such, the total value of multi-year contracts that Comtech
    has received is substantially higher.
  • Comtech received a number of strategic contracts and orders,
    including: (i) a $59.0 million contract to provide the U.S. Navy with
    SLM-5650B satellite modems, upgrade kits and related services; (ii)
    $16.9 million of orders to provide ongoing sustainment services for
    the U.S. Army’s “SNAP” mobile satellite communications program; (iii)
    $14.2 million of orders to supply the U.S. Army with advanced VSAT
    equipment; (iv) a $10.1 million multi-year contract to provide one of
    the largest wireless carriers in the U.S. with a hosted, advanced
    location services platform; (v) $8.5 million in contracts to supply
    Modular Transportable Transmission System troposcatter terminals to
    two international customers; and (vi) a $3.7 million contract
    modification from the Consortium Management Group to support the U.S.
    Army Project Manager Mission Command and the Blue Force Tracking-2
    (“BFT-2”) program to port additional waveforms onto the current BFT-2
    transceivers.
  • GAAP operating income was $14.0 million and GAAP net income was $8.2
    million, or $0.34 per diluted share.
  • Adjusted EBITDA was $23.5 million. Adjusted EBITDA is a non-GAAP
    financial measure which is reconciled to the most directly comparable
    GAAP financial measure and is more fully defined in the below table.
  • Cash flows from operating activities were $21.4 million.
  • Cash dividends of $2.4 million were paid to common stockholders.
  • $44.2 million of cash and cash equivalents as of April 30, 2018.

In commenting on Comtech’s performance during the third quarter of
fiscal 2018 and Comtech’s updated fiscal 2018 guidance, Fred Kornberg,
President and Chief Executive Officer, stated, “Our results for the
third quarter exceeded our expectations and our pipeline of
opportunities remains strong. Based on our strong year-to-date
performance and positive business momentum, we are increasing our fiscal
2018 operating income and Adjusted EBITDA targets, and expect fiscal
2018 to be a successful year. As we begin to look to fiscal 2019, we
believe that we are firmly positioned for growth.”

Updated 2018 Fiscal Year Financial Targets

  • Comtech is maintaining its revenue target of approximately $570.0
    million to $585.0 million. Despite the absence of $6.7 million of
    BFT-1 intellectual property license fees that Comtech earned in fiscal
    2017 supporting the U.S. Army’s Blue Force Tracking Program, the
    mid-point of Comtech’s fiscal 2018 revenue target range represents a
    year-over-year growth rate of close to 5.0%.
  • Comtech is increasing its Adjusted EBITDA target to a new range of
    $73.5 million to $76.5 million, as compared to a prior range of $72.0
    million to $76.0 million. Despite the absence of the $6.7 million of
    BFT-1 intellectual property license fees, the mid-point of the new
    fiscal 2018 Adjusted EBITDA target range represents an annual growth
    rate of close to 6.0%. Adjusted EBITDA, as a percentage of net sales,
    is expected to be close to 13.0%.
  • From a timing perspective, Comtech’s fourth quarter of fiscal 2018 is
    still expected to be the peak quarter for both net sales and Adjusted
    EBITDA, but its third quarter of fiscal 2018 is now expected to be the
    peak quarter of operating income. Comtech’s operating income for the
    third quarter reflects the benefit of shipments of satellite earth
    station equipment to the U.S. Navy that were previously expected to
    occur in its fourth quarter of fiscal 2018. Comtech’s fourth quarter
    net sales assumptions now reflect this and other changes in product
    mix (including lower expected sales of higher margin cyber training
    software solutions).
  • Comtech’s fourth quarter net sales and Adjusted EBITDA are expected to
    be higher than the related amounts achieved in its third quarter of
    fiscal 2018 by approximately 15.0%. Comtech’s GAAP operating income
    and Adjusted EBITDA, as a percentage of its consolidated fourth
    quarter fiscal 2018 net sales, are expected to approximate 6.0% and
    15.0%, respectively.
  • Comtech’s new estimated effective tax rate of 27.0% for fiscal 2018
    reflects seven months of benefit related to Tax Reform. Although
    Comtech continues to perform an analysis of Tax Reform and its impact,
    Comtech’s assessment is that its effective tax rate in fiscal 2019,
    before any discrete items, will now range from 23.5% to 25.0%. During
    the nine months ended April 30, 2018, Comtech recorded an estimated
    net discrete tax benefit of $14.1 million, primarily due to the
    remeasurement of deferred tax liabilities associated with
    non-deductible amortization related to intangible assets that was
    required as a result of Tax Reform.
  • Comtech is updating its GAAP diluted EPS target to a new range of
    $1.17 to $1.23, as compared to a prior range of $1.08 to $1.23. The
    new target range includes the benefit of $0.59 per diluted share
    primarily due to the remeasurement of deferred tax assets and
    liabilities as a result of Tax Reform. GAAP diluted EPS for Comtech’s
    fourth quarter of fiscal 2018 is expected to approximate a range of
    $0.24 to $0.30 per diluted share.
  • If order flow remains strong and Comtech is able to achieve all of its
    fiscal 2018 business goals, it is possible that Comtech’s fiscal 2018
    consolidated net sales, GAAP diluted EPS and Adjusted EBITDA could be
    higher than its targeted amounts.

Additional information about Comtech’s third quarter financial results
and Business Outlook for Fiscal 2018 is more thoroughly described in
Comtech’s Form 10-Q filed with the SEC today and Comtech’s third quarter
investor presentation which is located on its website at www.comtechtel.com.

Conferenza telefonica

Comtech has scheduled an investor conference call for 8:30 AM (ET) on
Thursday, June 7, 2018. Investors and the public are invited to access a
live webcast of the conference call from the Investor Relations section
of the Comtech website at www.comtechtel.com.
Alternatively, investors can access the conference call by dialing (877)
876-9176 (domestic), or (785) 424-1667 (international) and using the
conference I.D. “Comtech.” A replay of the conference call will be
available for seven days by dialing (800) 839-2434 or (402) 220-7211. In
addition, an updated investor presentation, including earnings guidance,
is available on Comtech’s website.

Informazioni su Comtech

Comtech Telecommunications Corp. progetta, sviluppa, produce e commercializza
prodotti, sistemi e servizi innovativi per soluzioni di comunicazione
avanzate. Comtech vende prodotti a una base di clienti diversificata nei mercati delle comunicazioni
mercati globali delle comunicazioni commerciali e governative.

Dichiarazione di cautela in merito alle dichiarazioni previsionali

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, 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, among other things: the risk that the Company will be
unsuccessful in implementing a tactical shift in its Government
Solutions segment away from bidding on large commodity service contracts
and toward pursuing contracts for its niche products with higher
margins; 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; new product
announcements and enhancements, including the risks associated with the
Company’s recent launch of HeightsTM Dynamic Network Access
Technology (“HEIGHTS” or “HDNA”); changing customer demands; changes in
prevailing economic and political conditions; changes in the price of
oil in global markets; changes in foreign currency exchange rates; risks
associated with the Company’s and TeleCommunication Systems, Inc.’s
(“TCS”) legacy legal proceedings, customer claims for indemnification
and other similar matters; risks associated with the Company’s
obligations under its Secured Credit Facility, as amended; risks
associated with the Company’s large contracts; the impact of H.R.1, also
known as the Tax Cuts and Jobs Act (“Tax Reform”), which was enacted in
December 2017 in the U.S.; and other factors described in this and the
Company’s other filings with the Securities and Exchange Commission.

COMTECH TELECOMMUNICATIONS CORP.

E FILIALI

Bilancio consolidato sintetico

(Non certificato)

Tre mesi chiusi al 30 aprile, Nove mesi chiusi al 30 aprile,
2018 2017 2018 2017
Vendite nette $ 147,854,000 127,792,000 403,154,000 402,606,000
Costo del venduto 85,418,000 75,331,000 242,201,000 244,833,000
Utile lordo 62,436,000 52,461,000 160,953,000 157,773,000
Spese:
Vendite, spese generali e amministrative 30,410,000 25,923,000 86,100,000 89,596,000
Ricerca e sviluppo 12,778,000 12,961,000 39,963,000 40,371,000
Ammortamento delle attività immateriali 5,269,000 5,468,000 15,806,000 17,555,000
Risoluzione di controversie in materia di proprietà intellettuale - (2,041,000 ) - (12,020,000 )
48,457,000 42,311,000 141,869,000 135,502,000
Utile operativo 13,979,000 10,150,000 19,084,000 22,271,000
Altri costi (proventi):
Interessi passivi 2,500,000 2,761,000 7,607,000 8,938,000
Interessi (proventi) e altri 198,000 88,000 189,000 12,000

Income before provision for (benefit from)
income taxes

11,281,000 7,301,000 11,288,000 13,321,000
Accantonamento (beneficio) per imposte sul reddito 3,071,000 2,884,000 (11,023,000 ) 4,808,000
Utile netto $ 8,210,000 4,417,000 22,311,000 8,513,000
Utile netto per azione:
Base $ 0.34 0.19 0.94 0.36
Diluito $ 0.34 0.19 0.93 0.36

Weighted average number of common shares
outstanding – basic

23,834,000 23,449,000 23,819,000 23,420,000

Weighted average number of common and
common equivalent
shares outstanding – diluted

24,052,000 23,503,000 23,999,000 23,449,000

Dividends declared per issued and outstanding
common share as
of the applicable dividend
record date

$ 0.10 0.10 0.30 0.50

COMTECH TELECOMMUNICATIONS CORP.

E FILIALI

Bilancio consolidato sintetico

30 aprile 2018 31 luglio 2017
(Non certificato) (certificato)
Attività

Attività correnti:
Liquidità ed equivalenti di cassa $ 44,173,000 41,844,000
Crediti, netti 127,267,000 124,962,000
Rimanenze, nette 76,554,000 60,603,000
Risconti attivi e altre attività correnti 13,912,000 13,635,000
Totale attività correnti 261,906,000 241,044,000
Immobili, impianti e attrezzature, netti 30,240,000 32,847,000
Avviamento 290,633,000 290,633,000
Attività immateriali a vita definita, nette 246,065,000 261,871,000
Costi di finanziamento differiti, netti 2,420,000 3,065,000
Altre attività, nette 2,808,000 2,603,000
Totale attività $ 834,072,000 832,063,000
Passivo e patrimonio netto
Passività correnti:
Debiti $ 30,125,000 29,402,000
Ratei passivi e altre passività correnti 66,258,000 68,610,000
Dividendi da pagare 2,354,000 2,343,000
Customer advances and other 33,485,000 25,771,000
Quota corrente del debito a lungo termine 17,211,000 15,494,000
Quota corrente di leasing di capitale e altre obbligazioni 2,540,000 2,309,000
Interessi passivi 532,000 282,000
Totale passività correnti 152,505,000 144,211,000
Quota non corrente del debito a lungo termine, netto 161,856,000 176,228,000
Quota non corrente di leasing di capitale e altre obbligazioni 993,000 1,771,000
Imposte sul reddito da pagare 2,592,000 2,515,000
Passività fiscali differite, nette 6,069,000 17,306,000
Customer advances and other, non-current 7,761,000 7,227,000
Altre passività 4,512,000 2,655,000
Totale passività 336,288,000 351,913,000
Impegni e imprevisti
Patrimonio netto:

Azioni privilegiate, valore nominale $.10 per azione; azioni autorizzate e non emesse 2.000.000 di azioni.
non emesse
2.000.000

- -

Common stock, par value $.10 per share; authorized 100,000,000
shares;
issued 38,675,301 shares and 38,619,467 shares at
April 30, 2018 and July
31, 2017, respectively

3,868,000 3,862,000
Riserva di capitale versato 535,620,000 533,001,000
Utili a nuovo 400,145,000 385,136,000
939,633,000 921,999,000
Meno:

Treasury stock, at cost (15,033,317 shares at April 30, 2018
and
July 31, 2017)

(441,849,000 ) (441,849,000 )
Totale patrimonio netto 497,784,000 480,150,000
Totale passività e patrimonio netto $ 834,072,000 832,063,000

COMTECH TELECOMMUNICATIONS CORP.

E FILIALI

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

(Non certificato)

Uso di misure finanziarie non-GAAP

Al fine di fornire agli investitori ulteriori informazioni sui risultati finanziari, il presente comunicato stampa contiene i "dati finanziari non-GAAP".
risultati finanziari, il presente comunicato stampa contiene "misure finanziarie non-GAAP
non-GAAP" ai sensi delle norme della SEC. L'EBITDA rettificato della Società è una misura
Non-GAAP che rappresenta l'utile (perdita) prima delle imposte sul reddito,
interessi (reddito) e altre spese, interessi passivi, ammortamento di
di compensazione a base azionaria, ammortamento di beni immateriali, ammortamento
svalutazione, risoluzione di controversie in materia di proprietà intellettuale, spese per piani di acquisizione o per l'analisi di alternative strategiche.
di acquisizione o di analisi di alternative strategiche e altre spese. La definizione di
La definizione di EBITDA rettificato della Società può differire da quella utilizzata da altre società.
di EBITDA utilizzata da altre società e pertanto potrebbe non essere paragonabile a
misure con titolo simile utilizzate da altre società. L'EBITDA rettificato è
è anche un parametro spesso richiesto dagli investitori e dagli analisti della Società.
analisti della Società. L'azienda ritiene che gli investitori e gli analisti possano utilizzare
l'EBITDA rettificato, insieme ad altre informazioni contenute nella documentazione SEC
nella valutazione delle prestazioni della Società e della comparabilità dei suoi risultati con quelli di altre società.
risultati della Società con quelli di altre società. Queste misure finanziarie Non-GAAP hanno
come strumento analitico, in quanto non tengono conto dell'impatto finanziario delle
delle transazioni necessarie per la conduzione dell'attività della Società, come ad esempio la
concessione di premi di compensazione azionaria, e non sono da intendersi come un'alternativa alle misure
alternativa alle misure finanziarie preparate in conformità ai GAAP.
Tali misure sono rettificate come descritto nella riconciliazione tra GAAP e Non-GAAP riportata di seguito.
GAAP a Non-GAAP nella tabella sottostante, ma tali rettifiche non devono essere
non devono essere interpretate come un'affermazione che tutti questi aggiustamenti o costi siano
insoliti, infrequenti o non ricorrenti. Le misure finanziarie Non-GAAP devono
essere considerati in aggiunta, e non come sostitutivi o superiori a
alle misure finanziarie determinate in conformità ai GAAP. Si consiglia agli investitori di
si consiglia agli investitori di esaminare attentamente i risultati finanziari GAAP che sono
divulgati nei documenti SEC della Società. La Società non ha
quantitativamente l'obiettivo dell'EBITDA rettificato per l'anno fiscale 2018 alla misura GAAP più
misura GAAP più direttamente comparabile, in quanto voci come i compensi basati su azioni, gli
come i compensi basati sulle azioni, le rettifiche all'accantonamento per le imposte sul reddito,
ammortamento di beni immateriali e interessi passivi, che sono voci specifiche che incidono su queste misure, non hanno
che incidono su queste misure, non si sono ancora verificati, sono fuori dal controllo della Società o non possono essere
controllo della Società o non possono essere previsti. Ad esempio, la quantificazione
delle spese per compensi basati su azioni richiede input quali il numero di azioni concesse e il prezzo di mercato
numero di azioni concesse e il prezzo di mercato che non sono attualmente accertabili.
Di conseguenza, le riconciliazioni con le metriche previsionali Non-GAAP non sono disponibili senza uno sforzo eccessivo.
non sono disponibili senza uno sforzo irragionevole e tali voci di riconciliazione non disponibili potrebbero
elementi di riconciliazione potrebbero avere un impatto significativo sui risultati finanziari della Società.
risultati finanziari della Società.

Tre mesi chiusi al 30 aprile, Nove mesi chiusi al 30 aprile, Anno fiscale
2018 2017 2018 2017 2017

Reconciliation of GAAP Net Income to
Adjusted
EBITDA:

Utile netto $ 8,210,000 4,417,000 22,311,000 8,513,000 $ 15,827,000
Accantonamento (beneficio) per imposte sul reddito 3,071,000 2,884,000 (11,023,000 ) 4,808,000 9,654,000
Interessi (proventi) e altri costi 198,000 88,000 189,000 12,000 (68,000 )
Interessi passivi 2,500,000 2,761,000 7,607,000 8,938,000 11,629,000
Ammortamento dei compensi basati su azioni 1,104,000 991,000 2,931,000 2,980,000 8,506,000
Ammortamento delle attività immateriali 5,269,000 5,468,000 15,806,000 17,555,000 22,823,000
Ammortamento 3,170,000 3,532,000 9,833,000 10,849,000 14,354,000
Risoluzione di controversie in materia di proprietà intellettuale - (2,041,000 ) - (12,020,000 ) (12,020,000 )
EBITDA rettificato $ 23,522,000 18,100,000 47,654,000 41,635,000 $ 70,705,000

ECMTL

Media:
Michael D. Porcelain, Senior Vice President and Chief
Financial Officer
631-962-7103
[email protected]

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