FORM 8-K |
March 6, 2014 | 0-7928 | |
Date of Report (Date of earliest event reported) | Commission File Number |
(Exact name of registrant as specified in its charter) |
Delaware | 11-2139466 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
68 South Service Road, Suite 230 Melville, New York 11747 | ||
(Address of Principal Executive Offices) (Zip Code) | ||
(631) 962-7000 | ||
(Registrant’s telephone number, including area code) |
Exhibit Number | Description |
By: | /s/ Michael D. Porcelain Name: Michael D. Porcelain Title: Senior Vice President and |
• | Backlog as of January 31, 2014 was $168.0 million compared to $182.8 million as of October 31, 2013. |
• | Total bookings for the three and six months ended January 31, 2014 were $70.7 million and $147.2 million, respectively, compared to $67.7 million and $138.0 million for the three and six months ended January 31, 2013, respectively. |
• | Adjusted EBITDA was $15.5 million and $29.8 million for the three and six months ended January 31, 2014, respectively, as compared to $10.1 million and $28.6 million for the three and six months ended January 31, 2013, respectively. Adjusted EBITDA is a Non-GAAP financial measure and is defined in the below table. |
• | The Company's effective income tax rate for the three months ended January 31, 2014 was 36.4%. The Company’s effective income tax rate for the twelve months ending July 31, 2014 is expected to approximate 36.5%, excluding any discrete tax adjustments. |
• | At January 31, 2014, the Company had $318.0 million of cash and cash equivalents. |
• | During the three months ended January 31, 2014, the Company repurchased 811,239 shares of its common stock in open-market transactions with an average price per share of $31.46 and at an aggregate cost of $25.5 million (including transaction costs). Since establishing the Company’s first repurchase program on September 23, 2010, the Company has repurchased a total of 13,684,892 shares of common stock for approximately $406.1 million (including transaction costs), including 351,336 shares of common stock at an aggregate cost of approximately $11.0 million (including transaction costs) repurchased during the period February 1, 2014 through March 5, 2014. The Company can make additional repurchases of up to approximately $44.0 million pursuant to its existing $100.0 million stock repurchase program. |
• | GAAP diluted earnings per share guidance for fiscal 2014 assumes that the Company's 3.0% convertible senior notes will be redeemed or repurchased by the Company for cash in May 2014 (the Company's fourth quarter of fiscal 2014). If the 3.0% convertible senior notes are converted into common stock in May 2014, the Company's GAAP diluted earnings per share guidance for fiscal 2014 would be reduced by approximately $0.08 to reflect the issuance of additional shares of common stock. The Company's 3.0% convertible senior notes are reflected as a current liability in its condensed consolidated balance sheet at January 31, 2014. |
• | Additional information about the Company’s updated fiscal 2014 guidance is included in the Company’s second quarter investor presentation which is located on the Company’s website at www.comtechtel.com. |
Three months ended January 31, | Six months ended January 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Net sales | $ | 85,499,000 | 74,577,000 | 168,867,000 | 165,530,000 | |||||||
Cost of sales | 48,130,000 | 42,337,000 | 95,120,000 | 91,487,000 | ||||||||
Gross profit | 37,369,000 | 32,240,000 | 73,747,000 | 74,043,000 | ||||||||
Expenses: | ||||||||||||
Selling, general and administrative | 16,349,000 | 15,433,000 | 32,547,000 | 32,243,000 | ||||||||
Research and development | 8,266,000 | 9,278,000 | 16,765,000 | 19,327,000 | ||||||||
Amortization of intangibles | 1,582,000 | 1,582,000 | 3,164,000 | 3,164,000 | ||||||||
26,197,000 | 26,293,000 | 52,476,000 | 54,734,000 | |||||||||
Operating income | 11,172,000 | 5,947,000 | 21,271,000 | 19,309,000 | ||||||||
Other expenses (income): | ||||||||||||
Interest expense | 1,998,000 | 2,030,000 | 4,016,000 | 4,141,000 | ||||||||
Interest income and other | (228,000 | ) | (315,000 | ) | (501,000 | ) | (591,000 | ) | ||||
Income before provision for income taxes | 9,402,000 | 4,232,000 | 17,756,000 | 15,759,000 | ||||||||
Provision for income taxes | 3,419,000 | 1,867,000 | 6,468,000 | 5,959,000 | ||||||||
Net income | $ | 5,983,000 | 2,365,000 | 11,288,000 | 9,800,000 | |||||||
Net income per share: | ||||||||||||
Basic | $ | 0.37 | 0.14 | 0.70 | 0.57 | |||||||
Diluted | $ | 0.32 | 0.14 | 0.60 | 0.51 | |||||||
Weighted average number of common shares outstanding – basic | 15,970,000 | 17,300,000 | 16,212,000 | 17,340,000 | ||||||||
Weighted average number of common and common equivalent shares outstanding – diluted | 22,487,000 | 17,401,000 | 22,552,000 | 23,394,000 | ||||||||
Dividends declared per issued and outstanding common share as of the applicable dividend record date | $ | 0.30 | 0.275 | 0.575 | 0.55 |
January 31, 2014 | July 31, 2013 | |||||
(Unaudited) | (Audited) | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 317,993,000 | 356,642,000 | |||
Accounts receivable, net | 56,879,000 | 49,915,000 | ||||
Inventories, net | 70,095,000 | 65,482,000 | ||||
Prepaid expenses and other current assets | 11,846,000 | 7,428,000 | ||||
Deferred tax asset, net | 10,030,000 | 10,184,000 | ||||
Total current assets | 466,843,000 | 489,651,000 | ||||
Property, plant and equipment, net | 20,332,000 | 20,333,000 | ||||
Goodwill | 137,354,000 | 137,354,000 | ||||
Intangibles with finite lives, net | 29,341,000 | 32,505,000 | ||||
Deferred financing costs, net | 471,000 | 1,093,000 | ||||
Other assets, net | 873,000 | 879,000 | ||||
Total assets | $ | 655,214,000 | 681,815,000 | |||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Convertible senior notes, current | $ | 200,000,000 | 200,000,000 | |||
Accounts payable | 18,600,000 | 18,390,000 | ||||
Accrued expenses and other current liabilities | 25,926,000 | 29,892,000 | ||||
Dividends payable | 4,731,000 | 4,531,000 | ||||
Customer advances and deposits | 15,337,000 | 14,749,000 | ||||
Interest payable | 1,529,000 | 1,529,000 | ||||
Total current liabilities | 266,123,000 | 269,091,000 | ||||
Other liabilities | 4,161,000 | 3,958,000 | ||||
Income taxes payable | 3,162,000 | 2,963,000 | ||||
Deferred tax liability, net | 1,823,000 | 1,741,000 | ||||
Total liabilities | 275,269,000 | 277,753,000 | ||||
Commitments and contingencies | ||||||
Stockholders’ equity: | ||||||
Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000 | — | — | ||||
Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 29,186,440 shares and 29,066,792 shares at January 31, 2014 and July 31, 2013, respectively | 2,919,000 | 2,907,000 | ||||
Additional paid-in capital | 366,889,000 | 363,888,000 | ||||
Retained earnings | 405,375,000 | 403,398,000 | ||||
775,183,000 | 770,193,000 | |||||
Less: | ||||||
Treasury stock, at cost (13,544,493 shares and 12,608,501 shares at January 31, 2014 and July 31, 2013, respectively) | (395,238,000 | ) | (366,131,000 | ) | ||
Total stockholders’ equity | 379,945,000 | 404,062,000 | ||||
Total liabilities and stockholders’ equity | $ | 655,214,000 | 681,815,000 | |||
Three months ended January 31, | Six months ended January 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Reconciliation of GAAP Net Income to Adjusted EBITDA(1): | ||||||||||||
GAAP net income | $ | 5,983,000 | 2,365,000 | 11,288,000 | 9,800,000 | |||||||
Income taxes | 3,419,000 | 1,867,000 | 6,468,000 | 5,959,000 | ||||||||
Net interest expense and other | 1,770,000 | 1,715,000 | 3,515,000 | 3,550,000 | ||||||||
Amortization of stock-based compensation | 1,069,000 | 806,000 | 2,016,000 | 1,551,000 | ||||||||
Depreciation and other amortization | 3,255,000 | 3,576,000 | 6,547,000 | 7,183,000 | ||||||||
Restructuring charges related to the wind-down of microsatellite product line | — | (253,000 | ) | — | 569,000 | |||||||
Adjusted EBITDA | $ | 15,496,000 | 10,076,000 | 29,834,000 | 28,612,000 |
(1) | Represents earnings before interest, income taxes, depreciation and amortization of intangibles and stock-based compensation and restructuring 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 filings, in assessing its ability to generate cash flow and service debt. |