Comtech Telecommunications Corp. Announces Results for Fiscal 2018 Fourth Quarter and Full Year and Provides Fiscal 2019 Guidance

MELVILLE, N.Y. –
September 26, 2018– Comtech Telecommunications Corp. (NASDAQ: CMTL)
today reported its operating results for the fourth quarter and fiscal
year ended July 31, 2018. The Company also announced financial targets
for its 2019 fiscal year.

2018 Fourth Quarter Highlights

  • Net sales for the fourth quarter of fiscal 2018 were $167.4 million as
    compared to the $147.8 million achieved during the fourth quarter of
    fiscal 2017.
  • Bookings during the fourth quarter of fiscal 2018 were $214.4 million,
    with a company-wide book-to-bill ratio (a measure defined as bookings
    divided by net sales) of 1.28.
  • Comtech received a number of strategic contracts and orders,
    including: (i) $44.8 million of orders to supply the U.S. Army with
    advanced VSAT equipment; (ii) a $31.0 million order to supply its
    Modular Transportable Transmission System troposcatter terminals to a
    foreign subsidiary of a U.S. based top-tier prime contractor; (iii) an
    award of over $20.0 million from a systems integrator for its new
    high-frequency amplifier products to support high-speed satellite
    networks; (iv) $16.6 million of orders to provide ongoing sustainment
    services for the U.S. Army’s “SNAP” mobile satellite communications
    program; and (v) multi-year contract renewals worth $14.2 million for
    various SMS text messaging solutions.
  • GAAP operating income was $16.0 million and GAAP net income was $7.5
    million, or $0.31 per diluted share. GAAP net income was negatively
    impacted by a net discrete tax expense of $2.3 million, or $0.09 per
    diluted share (“Tax Expense”), primarily due to updated estimates of
    the impact of H.R.1, also known as the Tax Cuts and Jobs Act (“Tax
    Reform”). Excluding the $2.3 million of Tax Expense, GAAP net income
    would have been $9.7 million, or $0.40 per diluted share.
  • Adjusted EBITDA was $30.7 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.
  • During the fourth quarter of fiscal 2018, the Company generated cash
    flows from operating activities of $19.7 million and reduced the level
    of its total indebtedness by $15.0 million. Total indebtedness as of
    July 31, 2018 was $171.3 million (excluding deferred financing fees)
    and its current cash borrowing rate is approximately 4.5%.
  • As of July 31, 2018, the Company had $43.5 million of cash and cash
    equivalents.

2018 Fiscal Year Highlights

  • Fiscal 2018 was the third consecutive year of revenue growth. Net
    sales for the fiscal year ended July 31, 2018 were $570.6 million as
    compared to the $550.4 million achieved during fiscal 2017.
  • Backlog as of July 31, 2018 reflects a record high of $630.7 million.
    Backlog 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. Bookings during
    fiscal 2018 were $755.1 million, with a company-wide book-to-bill
    ratio of 1.32.
  • GAAP operating income was $35.1 million and GAAP net income was $29.8
    million, or $1.24 per diluted share. GAAP net income includes a full
    year net discrete tax benefit of $11.8 million, or $0.49 per diluted
    share (“Tax Gain”), primarily due to Tax Reform. Excluding the Tax
    Gain, GAAP net income would have been $18.0 million or $0.75 per
    diluted share.
  • Adjusted EBITDA was $78.4 million for the fiscal year ended July 31,
    2018 as compared to the $70.7 million achieved during fiscal 2017.
  • During the fiscal year ended July 31, 2018, the Company generated cash
    flows from operating activities of $50.3 million and reduced the level
    of its total indebtedness by $29.2 million.

In commenting on the Company’s performance, Fred Kornberg, President and
Chief Executive Officer, noted “I could not be more pleased with our
fourth quarter and fiscal 2018 performance. We enter fiscal 2019 with a
record high backlog and strong business momentum in each of our two
operating segments. I believe we are well-positioned for fiscal 2019 to
be another successful year.”

2019 Fiscal Year Financial Targets

Looking forward, the Company believes that fiscal 2019 will be even
better and have established the following consolidated financial targets:

  • Net sales goal with a range of approximately $600.0 million to $625.0
    million.
  • Consolidated fiscal 2019 book-to-bill ratio expected to be in excess
    of 1.0.
  • GAAP operating income, as a percentage of net sales, expected to be
    higher than the 5.9% that Comtech achieved in fiscal 2018 when
    excluding the $1.7 million of favorable adjustments described in the
    Company’s annual report on Form 10-K.
  • The Company’s effective income tax rate (excluding discrete tax items
    in fiscal 2019) is expected to approximate 23.25% and reflects the
    full year benefit of the reduced U.S. statutory income tax rate
    resulting from Tax Reform.
  • GAAP diluted EPS goal with a range of approximately $0.89 to $1.10.
  • Adjusted EBITDA goal in a range of approximately $80.0 million to
    $86.0 million.

Comparable to Comtech’s business cycle for the past several years,
financial performance in the second half of fiscal 2019 is expected to
be higher than the first half of fiscal 2019. In addition, given the
straight-line amortization expense associated with intangible assets
with finite lives, the Company expects to report GAAP operating income
slightly above break-even in the first quarter of fiscal 2019, with each
of the remaining fiscal 2019 quarters achieving GAAP operating income.
Comtech’s GAAP operating income and Adjusted EBITDA in its first quarter
of fiscal 2019 are expected to be a bit better than the amounts it
achieved in the first quarter of fiscal 2018. After considering the
impact of expected fiscal 2019 interest expense and income taxes, like
in fiscal 2018, the Company expects to report a slight GAAP net loss in
the first quarter of fiscal 2019 and GAAP net income for the remainder
of the year.

In addition, based on the anticipated timing of shipments and
performance related to orders currently in the Company’s backlog and the
timing of expected new orders, net sales and Adjusted EBITDA for each of
its first three quarters of fiscal 2019 are expected to be a bit better
when compared to the respective quarters of fiscal 2018. The Company’s
fourth quarter of fiscal 2019 is expected to be the peak quarter, by
far, for consolidated net sales, operating income and Adjusted EBITDA.

The Company’s revenue goal reflects the adoption of the Financial
Accounting Standards Board’s Accounting Standards Codification Topic 606
“Revenue from Contracts with Customers, the
impact of which was not material. Although the amount and timing of
orders are difficult to predict, the Company expects to receive at least
one additional order for its Blue Force Tracker-2 High Capacity
(“BFT-2-HC”) mobile satellite transceivers in fiscal 2019. If the
Company receives and can ship multiple or very large orders for its
BFT-2-HC mobile satellite transceivers, actual fiscal 2019 net sales,
operating income and Adjusted EBITDA could ultimately be higher.

Additional information about the Company’s fiscal 2019 guidance is
included in the Company’s fourth quarter investor presentation which is
located on the Company’s website at www.comtechtel.com.

电话会议

The Company has scheduled an investor conference call for 8:30 AM (ET)
on Thursday, September 27, 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)
876-9174 (domestic), or (785) 424-1672 (international) and using the
conference I.D. “Comtech.” A replay of the conference call will be
available for seven days by dialing (800) 753-4652 or (402) 220-4235. In
addition, an updated investor presentation, including earnings guidance,
is available on the Company’s website.

关于康泰克

Comtech电信公司设计、开发、生产和销售用于先进通信的创新产品、系统和服务。
创新产品、系统和服务的先进通信解决方案。
解决方案。公司向全球商业和政府通信市场的不同客户群销售产品。
公司向全球商业和政府通信市场的不同客户群销售产品。

关于前瞻性声明的警告性声明

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 and or
procurement strategies; 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.
和子公司
合并业务报表
(未经审计) (已审计)
截至7月31日的三个月、 截至7月31日的12个月、
2018 2017 2018 2017
净销售额 $ 167,435,000 $ 147,762,000 $ 570,589,000 $ 550,368,000
销售成本 104,447,000 87,350,000 346,648,000 332,183,000
毛利润 62,988,000 60,412,000 223,941,000 218,185,000
支出:
销售、一般和行政 27,822,000 26,484,000 113,922,000 116,080,000
研究与发展 13,906,000 13,889,000 53,869,000 54,260,000
无形资产的摊销 5,269,000 5,268,000 21,075,000 22,823,000

Settlement of intellectual property
litigation

- - -

(12,020,000)

46,997,000 45,641,000 188,866,000 181,143,000
营业收入 15,991,000 14,771,000 35,075,000 37,042,000
其他费用(收入):
利息支出和其他 2,588,000 2,691,000 10,195,000 11,629,000
利息(收入)和其他 65,000 (80,000 ) 254,000

(68,000)

Income before provision for (benefit
from) income taxes

13,338,000 12,160,000 24,626,000 25,481,000
所得税准备金(收益 5,880,000 4,846,000 (5,143,000 ) 9,654,000
净收入 $ 7,458,000 $ 7,314,000 $ 29,769,000 $ 15,827,000
每股净收入:
基本 $ 0.31 $ 0.31 $ 1.25 $ 0.68
稀释的 $ 0.31 $ 0.31 $ 1.24 $ 0.67

流通在外的普通
股的加权平均数 - 基本

23,857,000 23,470,000 23,825,000 23,433,000

已发行的普通股
和普通股等价物的加权平均数

- 摊薄

24,270,000 23,566,000 24,040,000 23,489,000

在适用的红利记录日期,每股已发行和
流通的普通股所宣布的红利

适用的股息记录日期的已发行和流通的普通股宣布的股息

$ 0.10 $ 0.10 $ 0.40 $ 0.60
COMTECH TELECOMMUNICATIONS CORP.
和子公司
合并资产负债表
(已审计)
2018年7月31日 2017年7月31日
资产
流动资产:
现金和现金等价物 $ 43,484,000 $ 41,844,000
应收账款,净额 147,439,000 124,962,000
存货,净值 75,076,000 60,603,000
预付费用和其他流动资产 13,794,000 13,635,000
流动资产总额 279,793,000 241,044,000
财产、厂房和设备,净值 28,987,000 32,847,000
商誉 290,633,000 290,633,000
寿命有限的无形资产,净值 240,796,000 261,871,000
递延融资成本,净额 2,205,000 3,065,000
其他资产,净值 2,743,000 2,603,000
总资产 $ 845,157,000 $ 832,063,000
负债和股东权益
流动负债:
应付账款 $ 43,928,000 $ 29,402,000
应计费用和其他流动负债 65,034,000 68,610,000
应付股利 2,356,000 2,343,000
客户预付款和存款,流动 34,452,000 25,771,000
长期债务的当前部分 17,211,000 15,494,000
资本租赁和其他债务的当前部分 1,836,000 2,309,000
应付利息 499,000 282,000
流动负债总额 165,316,000 144,211,000
长期债务的非流动部分,净值 148,087,000 176,228,000
资本租赁和其他债务的非流动部分 765,000 1,771,000
应付所得税 2,572,000 2,515,000
递延税款负债,净额 10,927,000 17,306,000
客户预付款和存款,非流动 7,689,000 7,227,000
其他负债 4,117,000 2,655,000
负债总额 339,473,000 351,913,000
承诺和或有事项
股东的权益:

优先股,每股面值0.10美元;授权和未发行的股票
未发行的
2,000,000

- -

Common stock, par value $.10 per share; authorized 100,000,000
shares;
issued 38,860,571 shares and 38,619,467 shares at
July 31, 2018 and
2017, respectively

3,886,000 3,862,000
额外实收资本 538,453,000 533,001,000
留存收益 405,194,000 385,136,000
947,533,000 921,999,000
少:
Treasury stock, at cost (15,033,317 shares at July 31, 2018 and 2017) (441,849,000 )

(441,849,000)

股东权益总额 505,684,000 480,150,000
负债和股东权益总额 $ 845,157,000 $ 832,063,000

COMTECH TELECOMMUNICATIONS CORP.
and SUBSIDIARIES
非公认会计原则财务措施与公认会计原则财务措施的协调
非公认会计原则财务措施与公认会计原则财务措施的调节
(未经审计)

非公认会计原则财务措施的使用

In order to provide investors with additional information regarding its
financial results, this press release contains “Non-GAAP financial
measures” under the rules of the SEC. The Company’s Adjusted EBITDA is a
Non-GAAP measure that represents earnings (loss) before income taxes,
interest (income) and other expense, interest expense, amortization of
stock-based compensation, amortization of intangibles, depreciation
expense, settlement of intellectual property litigation, acquisition
plan expenses or strategic alternatives analysis expenses and other. The
Company’s definition of Adjusted EBITDA may differ from the definition
of EBITDA used by other companies and therefore 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 the Company’s performance and comparability of its
results with other companies. These Non-GAAP financial measures have
limitations as an analytical tool as they exclude the financial impact
of transactions necessary to conduct the Company’s business, such as the
granting of equity compensation awards, and are not intended to be an
alternative to financial measures prepared in accordance with GAAP.
These measures are adjusted as described in the reconciliation of GAAP
to Non-GAAP in the below table, but these adjustments should not be
construed as an inference that all of these adjustments or costs are
unusual, infrequent or non-recurring. Non-GAAP financial measures should
be considered in addition to, and not as a substitute for or superior
to, financial measures determined in accordance with GAAP. Investors are
advised to carefully review the GAAP financial results that are
disclosed in the Company’s SEC filings. The Company has not
quantitatively reconciled its fiscal 2019 Adjusted EBITDA target to the
most directly comparable GAAP measure because items such as stock-based
compensation, adjustments to the provision for income taxes,
amortization of intangibles and interest expense, which are specific
items that impact these measures, have not yet occurred, are out of the
Company’s control, or cannot be predicted. For example, quantification
of stock-based compensation expense requires inputs such as the number
of shares granted and market price that are not currently ascertainable.
Accordingly, reconciliations to the Non-GAAP forward looking metrics are
not available without unreasonable effort and such unavailable
reconciling items could significantly impact the Company’s financial
results.

截至7月31日的三个月、 截至7月31日的12个月、
2018 2017 2018 2017

Reconciliation of GAAP Net Income to
Adjusted
EBITDA:

净收入 $ 7,458,000 7,314,000 29,769,000 15,827,000
所得税准备金(收益 5,880,000 4,846,000 (5,143,000 ) 9,654,000
利息(收入)和其他 65,000 (80,000 ) 254,000

(68,000)

利息支出 2,588,000 2,691,000 10,195,000 11,629,000
基于股票的补偿的摊销 5,638,000 5,526,000 8,569,000 8,506,000
无形资产的摊销 5,269,000 5,268,000 21,075,000 22,823,000
折旧 3,822,000 3,505,000 13,655,000 14,354,000
知识产权诉讼的解决 - - -

(12,020,000)

调整后的EBITDA $ 30,720,000 29,070,000 78,374,000 70,705,000

ECMTL

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

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