[October 09, 2014] |
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Comtech Telecommunications Corp. Announces Results for Fiscal 2014 Fourth Quarter and Full Year and Provides Initial Fiscal 2015 Guidance
MELVILLE, N.Y. --(Business Wire)--
October 9, 2014--Comtech Telecommunications (News - Alert) Corp. (NASDAQ:CMTL) today
reported its operating results for the fourth quarter and fiscal year
ended July 31, 2014.
Net sales for the fourth quarter and full year of fiscal 2014 were $89.4
million and $347.2 million, respectively, as compared to $84.4 million
and $319.8 million for the same periods in fiscal 2013. The
year-over-year increase reflects higher sales in the Company's
telecommunications transmission and RF microwave amplifiers segments,
partially offset by lower sales in its mobile data communications
segment.
The Company reported GAAP diluted EPS of $0.48 and $1.37 for the fourth
quarter and full fiscal year ended July 31, 2014, respectively, as
compared to $0.28 and $0.97 for the comparative periods in fiscal 2013.
The Company also announced initial financial guidance for its July 31,
2015 fiscal year. The Company projects that sales for fiscal 2015 will
be between $355.0 million and $370.0 million. GAAP diluted EPS is
expected to be between $1.70 and $1.86. Adjusted EBITDA for fiscal 2015
is expected to be in the range of $63.0 million to $67.0 million.
In commenting on the Company's fiscal 2014 performance and fiscal 2015
business outlook, Fred Kornberg (News - Alert), President and Chief Executive Officer,
stated, "We are extremely pleased with our financial results in fiscal
2014. As we look to fiscal 2015, we see momentum continuing and expect
that fiscal 2015 will be a year of growth, both on the top and bottom
lines."
Selected Fiscal 2014 Fourth Quarter and Full Year Financial Metrics
and Other Items
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Backlog as of July 31, 2014 was $133.4 million compared to $189.7
million as of July 31, 2013.
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Total bookings for the three and twelve months ended July 31, 2014
were $62.1 million and $290.9 million, respectively, compared to
$144.0 million and $355.6 million for the three and twelve months
ended July 31, 2013, respectively.
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Adjusted EBITDA was $16.7 million and $61.3 million for the three and
twelve months ended July 31, 2014, respectively, as compared to $14.0
million and $52.2 million for the three and twelve months ended
July 31, 2013, respectively. Adjusted EBITDA is a Non-GAAP financial
measure and is defined in the below table.
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The Company's effective income tax rate in the fourth quarter of
fiscal 2014 was 33.0%, which includes a net discrete tax benefit of
$0.3 million. The Company's effective income tax rate of 34.7% for the
twelve months ended July 31, 2014 reflects a net discrete tax benefit
of $0.3 million. The Company's effective income tax rate, excluding
discrete tax items in fiscal 2014, was 35.5% and this rate is expected
to decrease to approximately 35.0% in fiscal 2015.
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During the three months ended July 31, 2014, the Company repurchased
397,778 shares of its common stock in open-market transactions with an
average price per share of $31.69 and at an aggregate cost of $12.6
million (including transaction costs).
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In fiscal 2014, $150.0 million principal amount of the Company's 3.0%
convertible senior notes were redeemed or repurchased for cash and
$50.0 million principal amount were converted by the holders into
1,570,904 shares of the Company's common stock. As of July 31, 2014,
none of the Company's 3.0% convertible senior notes remain outstanding.
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As of July 31, 2014, the Company had $154.5 million of cash and cash
equivalents which does not reflect the quarterly dividend payment of
$4.8 million that was paid on August 19, 2014.
-
As of October 8, 2014, the Company can repurchase approximately $13.7
million of additional common stock pursuant to its stock repurchase
program.
-
The Company's fiscal 2015 initial financial guidance does not include
any expenses or impact associated with the Company's ongoing strategic
alternative analysis.
Additional information about the Company's fiscal 2015 guidance is
included in the Company's fourth quarter investor presentation which is
located on the Company's website at www.comtechtel.com.
Conference Call
The Company has scheduled an investor conference call for 8:30 AM (ET)
on Friday, October 10, 2014. Investors and the public are invited to
access a live webcast of the conference call from the Investor Relations
section of the Comtech web site at www.comtechtel.com.
Alternatively, investors can access the conference call by dialing (866)
952-1906 (domestic), or (785) 424-1825 (international) and using the
conference I.D. of "Comtech." A replay of the conference call will be
available for seven days by dialing (800) 723-1517 or (402) 220-2659. In
addition, an updated investor presentation, including earnings guidance,
is available on the Company's web site.
About Comtech
Comtech Telecommunications Corp. designs, develops, produces and markets
innovative products, systems and services for advanced communications
solutions. The Company believes many of its solutions play a vital role
in providing or enhancing communication capabilities when terrestrial
communications infrastructure is unavailable, inefficient or too
expensive. The Company conducts business through three complementary
segments: telecommunications transmission, RF microwave amplifiers and
mobile data communications. The Company sells products to a diverse
customer base in the global commercial and government communications
markets. The Company believes it is a leader in most of the market
segments that it serves.
Cautionary Statement Regarding Forward-Looking Statements
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 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; changing customer demands; changes in
prevailing economic and political conditions; risks associated with the
Company's legal proceedings and other matters; risks associated with
certain U.S. government investigations; risks associated with the
Company's large contracts; risks associated with the Company's
obligations under its revolving credit facility; risks associated with
the Company's current exploration of strategic alternatives, and other
factors described in the Company's filings with the Securities and
Exchange Commission.
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COMTECH TELECOMMUNICATIONS CORP.
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AND SUBSIDIARIES
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Consolidated Statements of Operations
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(Unaudited)
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(Audited)
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Three months ended July 31,
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Twelve months ended July 31,
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2014
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2013
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2014
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2013
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Net sales
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$
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89,378,000
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84,411,000
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347,150,000
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319,797,000
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Cost of sales
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50,033,000
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49,051,000
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195,712,000
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178,967,000
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Gross profit
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39,345,000
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35,360,000
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151,438,000
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140,830,000
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Expenses:
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Selling, general and administrative
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17,280,000
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15,648,000
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67,147,000
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63,265,000
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Research and development
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8,444,000
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8,341,000
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34,108,000
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36,748,000
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Amortization of intangibles
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1,561,000
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1,582,000
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6,285,000
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6,328,000
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27,285,000
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25,571,000
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107,540,000
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106,341,000
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Operating income
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12,060,000
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9,789,000
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43,898,000
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34,489,000
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Other expenses (income):
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Interest expense
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295,000
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2,013,000
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6,304,000
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8,163,000
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Interest income and other
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(156,000
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)
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(289,000
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)
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(913,000
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)
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(1,167,000
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)
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Income before provision for income taxes
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11,921,000
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8,065,000
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38,507,000
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27,493,000
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Provision for income taxes
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3,933,000
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2,909,000
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13,356,000
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9,685,000
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Net income
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$
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7,988,000
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5,156,000
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25,151,000
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17,808,000
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Net income per share:
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Basic
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$
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0.50
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0.31
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1.58
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1.05
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Diluted
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$
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0.48
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0.28
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1.37
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0.97
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Weighted average number of common shares outstanding - basic
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16,124,000
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16,434,000
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15,943,000
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16,963,000
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Weighted average number of common and common equivalent shares
outstanding - diluted
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16,671,000
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22,620,000
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20,906,000
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23,064,000
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Dividends declared per issued and outstanding common share as of the
applicable dividend record date
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$
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0.30
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0.275
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1.175
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1.10
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COMTECH TELECOMMUNICATIONS CORP.
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AND SUBSIDIARIES
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Consolidated Balance Sheets
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(Audited)
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July 31, 2014
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July 31, 2013
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Assets
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Current assets:
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Cash and cash equivalents
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$
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154,500,000
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356,642,000
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Accounts receivable, net
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54,887,000
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49,915,000
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Inventories, net
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61,332,000
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65,482,000
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Prepaid expenses and other current assets
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9,947,000
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7,428,000
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Deferred tax asset, net
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10,178,000
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10,184,000
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Total current assets
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290,844,000
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489,651,000
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Property, plant and equipment, net
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18,536,000
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20,333,000
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Goodwill
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137,354,000
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137,354,000
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Intangibles with finite lives, net
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26,220,000
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32,505,000
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Deferred financing costs, net
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65,000
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1,093,000
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Other assets, net
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833,000
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879,000
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Total assets
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$
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473,852,000
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681,815,000
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Liabilities and Stockholders' Equity
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Current liabilities:
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Convertible senior notes, current
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$
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-
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200,000,000
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Accounts payable
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18,902,000
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18,390,000
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Accrued expenses and other current liabilities
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29,803,000
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29,892,000
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Dividends payable
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4,844,000
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4,531,000
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Customer advances and deposits
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12,610,000
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14,749,000
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Interest payable
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29,000
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1,529,000
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Total current liabilities
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66,188,000
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269,091,000
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Other liabilities
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4,364,000
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3,958,000
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Income taxes payable
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2,743,000
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2,963,000
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Deferred tax liability, net
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3,632,000
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1,741,000
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Total liabilities
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76,927,000
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277,753,000
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Commitments and contingencies
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Stockholders' equity:
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Preferred stock, par value $.10 per share; shares authorized and
unissued 2,000,000
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-
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Common stock, par value $.10 per share; authorized 100,000,000
shares; issued 31,016,469 shares and 29,066,792 shares at
July 31, 2014 and 2013, respectively
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3,102,000
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2,907,000
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Additional paid-in capital
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421,240,000
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363,888,000
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Retained earnings
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409,443,000
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403,398,000
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833,785,000
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770,193,000
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Less:
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Treasury stock, at cost (14,857,582 shares and 12,608,501 shares at
July 31, 2014 and 2013, respectively)
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(436,860,000
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(366,131,000
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)
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Total stockholders' equity
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396,925,000
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404,062,000
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Total liabilities and stockholders' equity
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$
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473,852,000
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681,815,000
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COMTECH TELECOMMUNICATIONS CORP.
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AND SUBSIDIARIES
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Reconciliation of Non-GAAP Financial Measures to GAAP Financial
Measures
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(Unaudited)
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Three months ended July 31,
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Twelve months ended July 31,
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2014
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2013
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2014
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2013
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Reconciliation of GAAP Net Income to Adjusted EBITDA(1):
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GAAP net income
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$
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7,988,000
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5,156,000
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25,151,000
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17,808,000
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Income taxes
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3,933,000
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2,909,000
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13,356,000
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9,685,000
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Net interest expense and other
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139,000
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1,724,000
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5,391,000
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6,996,000
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Amortization of stock-based compensation
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1,177,000
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885,000
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4,263,000
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3,130,000
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Depreciation and other amortization
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3,249,000
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3,460,000
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13,006,000
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14,165,000
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Strategic process expenses
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225,000
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-
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225,000
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-
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Restructuring (benefit) charges related to the wind-down of
microsatellite product line
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-
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(111,000
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)
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(56,000
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)
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458,000
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Adjusted EBITDA
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$
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16,711,000
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14,023,000
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61,336,000
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52,242,000
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(1)
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Represents earnings before interest, income taxes, depreciation and
amortization of intangibles and stock-based compensation, strategic
process expenses and restructuring (benefits) charges related to the
wind-down of the microsatellite product line of the Company's mobile
data communications segment. 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 (News - Alert) filings, in assessing its ability
to generate cash flow and service debt.
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ECMTL
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