8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

September 20, 2006	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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On September 20, 2006, Comtech Telecommunications Corp. (the “Registrant”) issued a press release announcing its results of operations for its fourth quarter ended July 31, 2006.

A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The information contained in this report (including the exhibit hereto) relating to this announcement shall not be deemed filed under the Securities and Exchange Commission’s rules and regulations and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is filed herewith:

Exhibit Number Description

99.1 Press Release, dated September 20, 2006, reporting the financial results of the Registrant for its fiscal 2006 fourth quarter (furnished and not filed herewith solely pursuant to Item 2.02).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Comtech Telecommunications Corp. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	COMTECH TELECOMMUNICATIONS CORP.
Dated: September 20, 2006
	By:	/s/ Michael D. Porcelain
		Name: Title:	Michael D. Porcelain Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Media Contacts:
Robert G. Rouse, Executive Vice President and Chief Operating Officer
Jerome Kapelus, Senior Vice President, Strategy and Business Development
(631) 962-7000
Info@comtechtel.com

COMTECH TELECOMMUNICATIONS CORP. ANNOUNCES
RESULTS FOR FISCAL 2006 FOURTH QUARTER AND FULL YEAR

Melville, New York - September 20, 2006 - Comtech Telecommunications Corp. (NASDAQ: CMTL) today reported record results for the fiscal year ended July 31, 2006. Net sales, operating profit, EBITDA, net income, diluted earnings per share and ending backlog for fiscal 2006 were at all-time highs.

Net sales for the fourth quarter of fiscal 2006 were $100.2 million compared to $98.3 million in the fourth quarter of fiscal 2005. Non-GAAP net income, which excludes stock option expense, was $12.9 million, or $0.48 per diluted share, for the three months ended July 31, 2006. GAAP net income was $11.8 million, or $0.45 per diluted share, for the three months ended July 31, 2006 compared to $11.0 million, or $0.42 per diluted share, for the three months ended July 31, 2005. No stock option expense was recorded for GAAP purposes prior to fiscal 2006.

Fiscal 2006 fourth quarter sales and gross profit were favorably impacted by $4.1 milion and $3.8 million, respectively, due to a gross profit adjustment to the MTS contract in our mobile data communications segment. The adjustment, as well as other adjustments affecting the full year results in both periods, is more fully described in our Form 10-K filed today.

Net sales for fiscal 2006 were $391.5 million compared to $307.9 million in fiscal 2005. Non-GAAP net income, excluding stock option expensing, was $49.6 million, or $1.86 per diluted share, for fiscal 2006. GAAP net income was $45.3 million, or $1.72 per diluted share, for fiscal 2006 compared to $36.7 million, or $1.42 per diluted share, for fiscal 2005.

GAAP net income for the fourth quarter and fiscal year ended July 31, 2006 includes $1.5 million and $5.7 million, respectively, of pre-tax compensation expense related to the adoption of Statement of Financial Accounting Standards No. 123(R) which requires the expensing of stock-based awards.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $20.3 million and $18.2 million for the three months ended July 31, 2006 and 2005, respectively. EBITDA was $78.3 million for fiscal 2006 versus $59.7 million for fiscal 2005. Cash flows from operating activities were $44.3 million for fiscal 2006 compared to $56.1 million in fiscal 2005.

Backlog as of July 31, 2006 was $186.0 million compared to $153.3 million as of July 31, 2005. Bookings for the quarter and fiscal year ended July 31, 2006 were $147.9 million and $424.2 million, respectively.

In commenting on the Company’s performance during the fourth quarter of fiscal 2006, Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., said, “Our strong fourth quarter results solidified fiscal 2006 as our most successful year ever.”

Mr. Kornberg added, “Our businesses continue to perform well and we believe fiscal 2007 is well-positioned to be another record year for Comtech.”

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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 or ineffective. The Company conducts business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers. The Company sells products to a diverse customer base in the global commercial and government communications markets. The Company believes it is a market leader in the market segments that it serves.

The Company has scheduled an investor conference call for 8:30 AM (ET) on Thursday, September 21, 2006. Investors and the public are invited to access a live webcast of the conference call from the news section of the Comtech web site at www.comtechtel.com. Alternatively, investors can access the conference call by dialing (877) 707-9628 (domestic) or (785) 832-1508 (international) and using the conference I.D. of “Comtech.” A replay of the conference call will be available for seven days by dialing (402) 220-6083. In addition, an updated investor presentation, including earnings guidance, will be available on our web site shortly after the conference call.

Certain information in this press release contains forward-looking statements, including but not limited to, information relating to the future performance and financial condition of the Company, the plans and objectives of the Company’s management and the Company’s assumptions regarding such performance and plans that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. The Company’s Securities and Exchange Commission filings identify many such risks and uncertainties, which include the following:

• Our operating results are difficult to forecast and subject to volatility;

• Our ability to maintain the level of our U.S. government business;

• If we are unable to comply with U.S. government regulations, we could be disqualified as a supplier to the U.S. government;

• Our dependence on international sales and international sales agents;

• Our ability to keep pace with technological changes;

• The impact of a domestic or foreign economic slow-down and reduction in telecommunications equipment and systems spending on the demand for our products, systems and services;

• Our mobile data communications business is subject to unique risks;

• Our backlog is subject to cancellation or modification;

• Our dependence on component availability, subcontractor availability and their performance and key suppliers, including the core manufacturing expertise of our high-volume technology manufacturing center located in Tempe, Arizona;

• Contract cost growth on our fixed price contracts and other contracts may not be recoverable;

• The impact of adverse regulatory changes on our ability to sell products, systems and services;

• Acquisitions and strategic investments may divert our resources and management attention;

• We have investments in recorded goodwill as a result of prior acquisitions, which could become impaired;

• The impact of losing key technical or management personnel;

• We may not be able to continuously manage growth in our businesses;

• The highly competitive nature of our markets;

• Our ability to protect our proprietary technology;

• Our operations being subject to environmental regulation;

• Our fiscal 2004 Federal income tax return is currently under audit;

• The impact of recently enacted and proposed changes in securities laws and regulations on our costs;

• The impact of ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002;

• The impact of recent changes to financial accounting standards related to stock option expensing on our reported results;

• The impact of prevailing economic and political conditions on our businesses;

• The impact of terrorist attacks and threats, and government responses thereto, and threats of war, on our businesses;

• The inability to effectuate a change in control of the Company due to provisions in its certificate of incorporation and by-laws, stockholders’ rights plan and Delaware law;

• Our inability to satisfy our debt obligations, including the convertible senior notes;

• Our stock price is volatile; and

• Our current intention not to declare or pay any cash dividends.

COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations

	Three Months Ended July 31,						Fiscal Year Ended July 31,
	2006			2005			2006			2005
Net sales	$	100,206,000			98,293,000			391,511,000			307,890,000
Cost of sales		56,413,000			59,816,000			232,210,000			180,524,000
Gross profit		43,793,000			38,477,000			159,301,000			127,366,000
Expenses:
Selling, general and administrative		19,801,000			15,707,000			67,071,000			51,819,000
Research and development		6,942,000			5,980,000			25,834,000			21,155,000
Amortization of intangibles		669,000			594,000			2,465,000			2,328,000
		27,412,000			22,281,000			95,370,000			75,302,000
Operating income		16,381,000			16,196,000			63,931,000			52,064,000
Other expenses (income):
Interest expense		670,000			674,000			2,687,000			2,679,000
Interest income		(2,839,000	)		(1,333,000	)		(9,243,000	)		(4,072,000	)
Income before provision for income taxes		18,550,000			16,855,000			70,487,000			53,457,000
Provision for income taxes		6,771,000			5,830,000			25,218,000			16,802,000
Net income	$	11,779,000			11,025,000			45,269,000			36,655,000
Net income per share:
Basic	$	0.52			0.50			1.99			1.69
Diluted	$	0.45			0.42			1.72			1.42
Weighted average number of common shares
outstanding - basic		22,830,000			22,176,000			22,753,000			21,673,000
Weighted average number of common and
common equivalent shares outstanding
assuming dilution - diluted		27,289,000			27,449,000			27,324,000			27,064,000

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Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

	Three Months Ended July 31,						Fiscal Year Ended July 31,
	2006			2005			2006			2005
Reconciliation of Non-GAAP Net Income,
Excluding Stock-based Compensation
Expense, To GAAP Net Income(1):
Non-GAAP net income, excluding stock-
based compensation expense	$	12,912,000			11,025,000			49,638,000			36,655,000
Pre-tax stock-based compensation expense		(1,469,000	)		—			(5,681,000	)		—
Tax effect of stock-based compensation
expense		336,000			—			1,312,000			—
GAAP net income	$	11,779,000			11,025,000			45,269,000			36,655,000
Reconciliation of Non-GAAP Diluted Earnings
Per Share, Excluding Stock-based
Compensation Expense, To GAAP Diluted
Earnings Per Share(1):
Non-GAAP diluted earnings per share,
excluding stock-based compensation	$	0.48			0.42			1.86			1.42
Pre-tax stock-based compensation expense		(0.04	)		—			(0.19	)		—
Tax effect of stock-based compensation
expense		0.01			—			0.05			—
GAAP diluted earnings per share	$	0.45			0.42			1.72			1.42
Reconciliation of GAAP Net Income to
EBITDA(2):
GAAP net income	$	11,779,000			11,025,000			45,269,000			36,655,000
Income taxes		6,771,000			5,830,000			25,218,000			16,802,000
Net interest income		(2,169,000	)		(659,000	)		(6,556,000	)		(1,393,000	)
Amortization of stock-based compensation		1,469,000			—			5,681,000			—
Depreciation and amortization		2,443,000			2,034,000			8,707,000			7,643,000
EBITDA	$	20,293,000			18,230,000			78,319,000			59,707,000

(1) Non-GAAP net income is used by management in assessing the Company’s operating results. The Company believes that investors and analysts may use non-GAAP measures that exclude stock-based compensation, along with other information contained in its SEC filings, in assessing the Company’s operating results.

(2) Represents earnings before interest, income taxes, depreciation and amortization of intangibles and stock-based compensation. EBITDA is a non-GAAP operating metric used by management in assessing the Company’s operating results and ability to meet debt service requirements. The Company’s definition of 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. EBITDA is also a measure frequently requested by the Company’s investors and analysts. The Company believes that investors and analysts may use 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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COMTECH TELECOMMUNICATIONS CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets

	July 31,
	2006			2005
Assets
Current assets:
Cash and cash equivalents	$	251,587,000			214,413,000
Restricted cash		1,003,000			1,034,000
Accounts receivable, net		70,047,000			56,052,000
Inventories, net		61,043,000			45,103,000
Prepaid expenses and other current assets		7,178,000			4,387,000
Deferred tax asset - current		7,591,000			8,092,000
Total current assets		398,449,000			329,081,000
Property, plant and equipment, net		24,732,000			18,683,000
Goodwill		22,244,000			22,244,000
Intangibles with finite lives, net		6,855,000			9,123,000
Deferred financing costs, net		2,449,000			2,995,000
Other assets, net		537,000			277,000
Total assets	$	455,266,000			382,403,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	28,337,000			23,577,000
Accrued expenses and other current liabilities		41,230,000			34,497,000
Customer advances and deposits		3,544,000			5,282,000
Deferred service revenue		9,896,000			8,210,000
Current installments of other obligations		154,000			235,000
Interest payable		1,050,000			1,050,000
Income taxes payable		5,252,000			1,540,000
Total current liabilities		89,463,000			74,391,000
Convertible senior notes		105,000,000			105,000,000
Other obligations, less current installments		243,000			396,000
Deferred tax liability - non-current		6,318,000			5,987,000
Total liabilities		201,024,000			185,774,000
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 and 30,000,000 shares at July 31, 2006 and July 31, 2005,
respectively; issued 23,052,593 shares and 22,781,678 shares at
July 31, 2006 and 2005, respectively		2,305,000			2,278,000
Additional paid-in capital		139,487,000			127,170,000
Retained earnings		112,635,000			67,366,000
		254,427,000			196,814,000
Less:
Treasury stock (210,937 shares)		(185,000	)		(185,000	)
Total stockholders’ equity		254,242,000			196,629,000
Total liabilities and stockholders’ equity	$	455,266,000			382,403,000

ECMTL

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