Comtech Telecommunications Corp. reported its operating results for the three and six months ended January 31, 2012. Net sales for the second quarter of fiscal 2012 were $99.1 million compared to $162.8 million for the second quarter of fiscal 2011. The period-over-period decrease is due to lower net sales, as expected, most notably in the mompany's mobile data communications segment.
GAAP net income was $5.8 million, or $0.27 per diluted share, for the second quarter of fiscal 2012 compared to $16.1 million, or $0.52 per diluted share, for the second quarter of fiscal 2011.
Net sales for the six months ended January 31, 2012 were $212.5 million compared to $341.0 million for the six months ended January 31, 2011. GAAP net income was $18.4 million, or $0.75 per diluted share, for the six months ended January 31, 2012 compared to $41.8 million, or $1.32 per diluted share, for the six months ended January 31, 2011.
The Company also announced that it is raising the low end of its fiscal 2012 revenue guidance by $20.0 million. As such, the Company's updated fiscal 2012 revenue guidance range is now $420.0 million to $430.0 million. In addition, the Company is increasing its Adjusted EBITDA guidance by $2.0 million to a new range of $72.0 million to $77.0 million, and is increasing its diluted earnings per share guidance to a new range of $1.34 to $1.44. This guidance includes the impact of the Company's repurchases of its common stock through March 7, 2012.
In commenting on the Company's performance and business outlook, Fred Kornberg, President and Chief Executive Officer, stated, "During the second quarter, we continued to successfully execute our business strategies. Our second quarter results clearly demonstrate that, despite challenging global economic conditions and operating in a period of significant U.S. and foreign government budgetary constraints, our business remains strong and our long-term growth plans remain on track."
Mr. Kornberg added, "We are currently negotiating a new BFT-1 sustainment contract with the U.S. Army. Although we are not yet certain of the exact mix of products and services that we will be asked to continue to supply, we are optimistic that at least one new BFT-1 sustainment contract will be awarded prior to March 31, 2012."
Selected Fiscal 2012 Second Quarter Financial Metrics and Other Items
- Backlog as of January 31, 2012 was $126.3 million compared to $127.0 million as of October 31, 2011.
- Total bookings for the three and six months ended January 31, 2012 were $98.4 million and $193.8 million, respectively, compared to $95.0 million and $202.5 million for the three and six months ended January 31, 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 $15.7 million and $39.2 million for the three and six months ended January 31, 2012, respectively, versus $32.3 million and $78.7 million for the three and six months ended January 31, 2011, respectively.
- The Company's income tax provision for the six months ended January 31, 2012 reflects a net discrete tax benefit of $3.5 million, almost all of which was recorded in the first quarter of fiscal 2012. 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 January 31, 2012, the Company had $400.2 million of cash and cash equivalents which does not reflect the subsequent (i) repurchase of an additional 308,279 shares of the Company's common stock for an aggregate cost of approximately $10.0 million (including transaction costs) from February 1, 2012 through March 7, 2012; or (ii) the quarterly dividend payment of $5.4 million which was paid on February 22, 2012.
- During the six months ended January 31, 2012, the Company repurchased 5,066,292 shares of its common stock at an aggregate cost of approximately $155.7 million (including transaction costs). From February 1, 2012 through March 7, 2012, the Company repurchased an additional 308,279 shares at an aggregate cost of approximately $10.0 million (including transaction costs). Since the establishment of the Company's repurchase programs, it has purchased a total of 9,672,079 shares of common stock for approximately $287.4 million (including transaction costs). The Company can make additional repurchases of up to $62.9 million pursuant to its existing $250.0 million repurchase program.
- During the three months ended January 31, 2012, the Company paid $6.1 million of cash dividends to its stockholders.
