Comtech Telecommunications Corp. Announces Results for the Third Quarter of Fiscal 2015 and Provides Updated Fiscal 2015 Guidance
Melville, NY, June 4, 2015–-Comtech Telecommunications Corp. (NASDAQ:CMTL) today reported its operating results for the three and nine months ended April 30, 2015.Net sales for the three months ended April 30, 2015 were US$ 71.6 million compared to US$ 88.9 million for the three months ended April 30, 2014.
The period-over-period decrease reflects lower net sales in the company's telecommunications transmission and RF microwave amplifier segments, partially offset by higher net sales in its mobile data communications segment. GAAP net income was US$ 5.0 million, or US$ 0.30 per diluted share, for the three months ended April 30, 2015 as compared to US$ 5.9 million, or US$ 0.32 per diluted share, for the three months ended April 30, 2014
“Against a backdrop of difficult market conditions, we continue to execute our business strategies and I remain convinced that Comtech is on the right path to growth.”
Net sales for the nine months ended April 30, 2015 were US$ 229.8 million compared to US$ 257.8 million for the nine months ended April 30, 2014. The period-over-period decrease reflects lower net sales in all three of the Company's operating segments. GAAP net income was US$ 17.8 million, or US$ 1.08 per diluted share, for the nine months ended April 30, 2015 as compared to US$ 17.2 million, or US$ 0.92 per diluted share, for the nine months ended April 30, 2014.
Based on the company's year-to-date results and anticipated fourth quarter performance, the company is updating its fiscal 2015 guidance. Fiscal 2015 revenue is now expected to range from US$ 310.0 million to US$ 314.0 million, adjusted EBITDA, as defined in the table below, is now expected to be in the range of US$ 52.0 million to US$ 56.0 million and GAAP diluted earnings per share is now expected to be in the range of US$ 1.38 to US$ 1.54.
In commenting on the company's performance and updated fiscal 2015 business outlook, Dr. Stanton Sloane, President and Chief Executive Officer, stated, “Against a backdrop of difficult market conditions, we continue to execute our business strategies and I remain convinced that Comtech is on the right path to growth.”
Dr. Sloane added, “During the quarter, we initiated certain organizational changes and cost reduction actions, which I believe will improve our operating efficiencies. At the same time, we have expanded our corporate marketing and business development function to enhance our focus on existing and untapped market opportunities. I believe all of these actions will result in demonstrable returns down the road and help us better serve our customers.”
Highlights of the Fiscal 2015 report include:
- Backlog as of April 30, 2015 was US$ 130.0 million compared to US$ 129.4 million as of January 31, 2015.
- Total bookings for the three and nine months ended April 30, 2015 were US$ 72.2 million and US$ 226.4 million, respectively, compared to US$ 81.6 million and US$ 228.8 million for the three and nine months ended April 30, 2014, respectively.
- Adjusted EBITDA was US$ 11.6 million and US$ 39.8 million for the three and nine months ended April 30, 2015, respectively, as compared to US$ 14.8 million and US$ 44.6 million for the three and nine months ended April 30, 2014, respectively. Adjusted EBITDA is a Non-GAAP financial measure and is defined in the below table.
- The effective tax rate for the three months ended April 30, 2015 reflects a discrete tax benefit of approximately US$ 0.3 million, principally related to the reversal of tax contingencies no longer required due to the expiration of applicable statutes of limitation. Excluding the impact of any discrete tax items, the Company's fiscal 2015 estimated effective tax rate is expected to approximate 34.75%.
- During the three months ended April 30, 2015, the Company repurchased 175,735 shares of its common stock in open-market transactions with an average price per share of $28.39 and at an aggregate cost of US$ 5.0 million (including transaction costs). As of June 3, 2015, the company is authorized to repurchase approximately US$ 8.7 million of additional common stock pursuant to its existing stock repurchase program.
- As of April 30, 2015, the company had US$ 142.0 million of cash and cash equivalents which does not reflect the quarterly dividend of $4.8 million that was paid on May 21, 2015.
- As discussed further in the company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission today, the company's President and Chief Executive Officer initiated an assessment of its operations to determine if changes in the company's business or operations would help it better serve its customers and potentially reduce annual operating expenses. This assessment is ongoing and may result in future one-time charges which are not reflected in the Company’s updated fiscal 2015 earnings guidance.
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