FORM 8-K |
June 7, 2012
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0-7928
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Date of Report
(Date of earliest event reported)
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Commission File Number
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![]() (Exact name of registrant as specified in its charter)
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Delaware
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11-2139466
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification Number)
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68 South Service Road, Suite 230
Melville, New York 11747
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(Address of Principal Executive Offices) (Zip Code)
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(631) 962-7000
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(Registrant’s telephone number, including area code)
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Exhibit Number
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Description
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COMTECH TELECOMMUNICATIONS CORP. |
By:
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/s/ Michael D. Porcelain
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Name: Michael D. Porcelain
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Title: Senior Vice President and
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Chief Financial Officer
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·
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Backlog as of April 30, 2012 was $137.4 million compared to $126.3 million as of January 31, 2012.
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·
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Total bookings for the three and nine months ended April 30, 2012 were $110.9 million and $304.7 million, respectively, compared to $127.7 million and $330.2 million for the three and nine months ended April 30, 2011, respectively.
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·
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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and amortization (including amortization of intangibles and stock-based compensation) and costs related to a withdrawn fiscal 2011 contested proxy solicitation (“Adjusted EBITDA”) was $15.4 million and $54.6 million for the three and nine months ended April 30, 2012, respectively, as compared to $28.9 million and $107.7 million for the three and nine months ended April 30, 2011, respectively.
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·
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The Company’s income tax provision for the three months ended April 30, 2012 reflects a net discrete tax benefit of $0.4 million. 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.
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·
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At April 30, 2012, the Company had $367.6 million of cash and cash equivalents which does not reflect the subsequent (i) repurchase of an additional 433,892 shares of the Company’s common stock for an aggregate cost of approximately $13.0 million (including transaction costs) from May 1, 2012 through June 6, 2012; (ii) quarterly dividend payment of $5.1 million which was paid on May 22, 2012; or (iii) May 2012 collection of $10.0 million of intellectual property license fees from the U.S. Army.
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·
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During the nine months ended April 30, 2012, the Company repurchased 6,054,022 shares of its common stock at an aggregate cost of approximately $188.1 million (including transaction costs). From May 1, 2012 through June 6, 2012, the Company repurchased an additional 433,892 shares at an aggregate cost of approximately $13.0 million (including transaction costs). Since the establishment of the Company’s repurchase programs, it has purchased a total of 10,785,422 shares of common stock for approximately $322.7 million (including transaction costs). The Company can make additional repurchases of up to $27.6 million pursuant to its existing $250.0 million repurchase program.
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·
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During the three months ended April 30, 2012, the Company paid $5.4 million of cash dividends to its stockholders.
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Additional information about the Company’s updated fiscal 2012 guidance is contained in the Company’s Third Quarter investor presentation which is located on the Company’s website at www.comtechtel.com.
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Three months ended April 30,
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Nine months ended April 30,
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2012
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2011
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2012
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2011
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Net sales
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$ | 99,793,000 | 131,081,000 | 312,295,000 | 472,052,000 | |||||||||||
Cost of sales
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58,115,000 | 74,110,000 | 177,921,000 | 289,937,000 | ||||||||||||
Gross profit
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41,678,000 | 56,971,000 | 134,374,000 | 182,115,000 | ||||||||||||
Expenses:
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Selling, general and administrative
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20,005,000 | 22,552,000 | 63,749,000 | 69,742,000 | ||||||||||||
Research and development
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9,481,000 | 10,328,000 | 28,609,000 | 31,546,000 | ||||||||||||
Amortization of intangibles
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1,626,000 | 2,173,000 | 5,037,000 | 6,064,000 | ||||||||||||
Merger termination fee, net
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- | - | - | (12,500,000 | ) | |||||||||||
31,112,000 | 35,053,000 | 97,395,000 | 94,852,000 | |||||||||||||
Operating income
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10,566,000 | 21,918,000 | 36,979,000 | 87,263,000 | ||||||||||||
Other expenses (income):
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Interest expense
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2,192,000 | 2,135,000 | 6,521,000 | 6,288,000 | ||||||||||||
Interest income and other
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(370,000 | ) | (557,000 | ) | (1,300,000 | ) | (1,877,000 | ) | ||||||||
Income before provision for income taxes
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8,744,000 | 20,340,000 | 31,758,000 | 82,852,000 | ||||||||||||
Provision for income taxes
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2,678,000 | 6,085,000 | 7,270,000 | 26,845,000 | ||||||||||||
Net income
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$ | 6,066,000 | 14,255,000 | 24,488,000 | 56,007,000 | |||||||||||
Net income per share:
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Basic
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$ | 0.32 | 0.54 | 1.18 | 2.05 | |||||||||||
Diluted
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$ | 0.29 | 0.47 | 1.04 | 1.79 | |||||||||||
Weighted average number of common shares outstanding – basic
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18,853,000 | 26,577,000 | 20,746,000 | 27,310,000 | ||||||||||||
Weighted average number of common and common equivalent shares outstanding – diluted
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24,910,000 | 32,378,000 | 26,724,000 | 33,069,000 | ||||||||||||
Dividends declared per issued and outstanding common share as of the applicable dividend record date
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$ | 0.275 | 0.25 | 0.825 | 0.75 | |||||||||||
April 30, 2012
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July 31, 2011
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Assets
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(Unaudited)
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(Audited)
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Current assets:
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Cash and cash equivalents
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$ | 367,649,000 | 558,804,000 | |||||
Accounts receivable, net
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73,009,000 | 70,801,000 | ||||||
Inventories, net
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76,664,000 | 74,661,000 | ||||||
Prepaid expenses and other current assets
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10,248,000 | 7,270,000 | ||||||
Deferred tax asset, net
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12,983,000 | 11,529,000 | ||||||
Total current assets
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540,553,000 | 723,065,000 | ||||||
Property, plant and equipment, net
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23,879,000 | 26,638,000 | ||||||
Goodwill
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137,354,000 | 137,354,000 | ||||||
Intangibles with finite lives, net
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40,433,000 | 45,470,000 | ||||||
Deferred financing costs, net
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2,947,000 | 3,823,000 | ||||||
Other assets, net
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1,194,000 | 1,159,000 | ||||||
Total assets
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$ | 746,360,000 | 937,509,000 | |||||
Liabilities and Stockholders’ Equity
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Current liabilities:
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Accounts payable
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$ | 18,363,000 | 23,501,000 | |||||
Accrued expenses and other current liabilities
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38,505,000 | 49,858,000 | ||||||
Dividends payable
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5,071,000 | 6,100,000 | ||||||
Customer advances and deposits
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17,151,000 | 11,011,000 | ||||||
Interest payable
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3,044,000 | 1,531,000 | ||||||
Income taxes payable
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- | 4,056,000 | ||||||
Total current liabilities
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82,134,000 | 96,057,000 | ||||||
Convertible senior notes
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200,000,000 | 200,000,000 | ||||||
Other liabilities
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5,581,000 | 6,360,000 | ||||||
Income taxes payable
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3,297,000 | 3,811,000 | ||||||
Deferred tax liability
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1,041,000 | 2,101,000 | ||||||
Total liabilities
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292,053,000 | 308,329,000 | ||||||
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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- | - | ||||||
Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 28,905,281 shares and 28,731,265 shares at April 30, 2012 and July 31, 2011, respectively
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2,891,000 | 2,873,000 | ||||||
Additional paid-in capital
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360,208,000 | 355,001,000 | ||||||
Retained earnings
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401,072,000 | 393,109,000 | ||||||
764,171,000 | 750,983,000 | |||||||
Less:
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Treasury stock, at cost (10,562,467 shares and 4,508,445 shares at April 30, 2012 and July 31, 2011, respectively)
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(309,864,000 | ) | (121,803,000 | ) | ||||
Total stockholders’ equity
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454,307,000 | 629,180,000 | ||||||
Total liabilities and stockholders’ equity
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$ | 746,360,000 | 937,509,000 | |||||
Three Months Ended April 30,
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Nine months Ended April 30,
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2012
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2011
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2012
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2011
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Reconciliation of GAAP Net Income to Adjusted EBITDA(1):
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GAAP net income
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$ | 6,066,000 | 14,255,000 | 24,488,000 | 56,007,000 | |||||||||||
Income taxes
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2,678,000 | 6,085,000 | 7,270,000 | 26,845,000 | ||||||||||||
Net interest expense and other
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1,822,000 | 1,578,000 | 5,221,000 | 4,411,000 | ||||||||||||
Amortization of stock-based compensation
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809,000 | 1,118,000 | 2,718,000 | 3,977,000 | ||||||||||||
Depreciation and other amortization
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4,064,000 | 5,905,000 | 12,256,000 | 16,416,000 | ||||||||||||
Costs related to withdrawn fiscal 2011 contested proxy solicitation
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- | - | 2,638,000 | - | ||||||||||||
Adjusted EBITDA
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$ | 15,439,000 | 28,941,000 | 54,591,000 | 107,656,000 |
(1)
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Represents earnings before interest, income taxes, depreciation and amortization of intangibles, stock-based compensation and costs related to a withdrawn fiscal 2011 contested proxy solicitation. 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 filings, in assessing its ability to generate cash flow and service debt.
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