<PAGE>
FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/89)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
Form 10-Q
(Mark One)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended April 30, 1996
--------------------------------------------------
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
---------------- ----------------
Commission File Number: 0-7928
--------------------------------------------------
COMTECH TELECOMMUNICATIONS CORP.
-----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2139466
-----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
105 Baylis Road, Melville, New York 11747
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(516) 777-8900
-----------------------------------------------------------------------
(Registrant's telephone number, including area code)
-----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(X) Yes ( ) No
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDING DURING
THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
( ) Yes ( ) No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, Par Value $.10 Per Share - 2,605,344 shares outstanding as
of 04/30/96.
-----------------------------------------------------------------------
<PAGE>
COMTECH TELECOMMUNICATIONS CORP.
--------------------------------
INDEX
-----
Page
No.
----
PART I FINANCIAL INFORMATION
Consolidated Balance Sheets - 3
April 30, 1996 (unaudited) and
July 31, 1995
Consolidated Statements of Operations - 4
Three Months and Nine Months Ended
April 30, 1996 and 1995 (unaudited)
Consolidated Statements of Cash Flows - 5
Nine Months Ended April 30, 1996 and 1995
(unaudited)
Notes to Consolidated Financial Statements (unaudited) 6-8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II OTHER INFORMATION 12
Exhibit 11.0 Computation of Income (Loss) Per
Common Share 13
Signature Page 14
2
<PAGE>
PART I
------
FINANCIAL INFORMATION
---------------------
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
April 30, 1996 July 31, 1995
-------------- -------------
(unaudited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 1,055,000 $ 2,019,000
Restricted cash 228,000 25,000
Marketable investment securities --- 275,000
Accounts receivable, less allowance for doubtful
accounts of $58,000 at April 30, 1996 and
$137,000 at July 31, 1995 4,329,000 4,490,000
Inventories, net 6,916,000 5,011,000
Prepaid expenses and other current assets 248,000 286,000
------------------ ----------------
Total current assets 12,776,000 12,106,000
------------------ ----------------
Property, plant and equipment, net 4,106,000 4,212,000
Other assets 407,000 465,000
Total assets $ 17,289,000 $ 16,783,000
------------------ ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current installments of long-term debt (including
payable to related party of $342,000 at April 30,
1996 and $319,000 at July 31, 1995) $ 606,000 $ 591,000
Notes payable --- 250,000
Accounts payable 2,275,000 1,894,000
Accrued expenses and other current liabilities 2,206,000 1,690,000
------------------ ----------------
Total current liabilities 5,087,000 4,425,000
Long-term debt, less current installments
(including payable to related party of $1,603,000
at April 30, 1996 and $1,862,000 at July 31, 1995) 2,071,000 2,277,000
Total liabilities 7,158,000 6,702,000
------------------ ----------------
Stockholders' equity:
Preferred stock, par value $.10 per share; shares
authorized and unissued 2,000,000 --- ---
Common stock, par value $.10 per share; authorized
10,000,000 shares; issued and outstanding 2,605,344
shares at April 30, 1996 and July 31, 1995 261,000 261,000
Additional paid-in capital 22,230,000 22,230,000
Accumulated deficit (11,733,000) (11,671,000)
------------------ ----------------
10,758,000 10,820,000
Less:
Treasury stock (15,000 shares) (180,000) (180,000)
Deferred compensation expense (445,000) (553,000)
Unrealized loss on securities (2,000) (6,000)
------------------ ----------------
10,131,000 10,081,000
Total liabilities and stockholders' equity $ 17,289,000 $ 16,783,000
------------------ ----------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 5,263,000 $ 4,494,000 $ 14,466,000 $ 11,535,000
------------ ------------ ------------- -------------
Operating costs and expenses:
Cost of sales 3,670,000 3,545,000 10,125,000 8,655,000
Selling, general and administrative 1,287,000 1,233,000 3,654,000 3,540,000
Research and development 164,000 312,000 556,000 762,000
------------ ------------ ------------- -------------
Total operating costs and expenses 5,121,000 5,090,000 14,335,000 12,957,000
------------ ------------ ------------- -------------
Operating earnings (loss) 142,000 (596,000) 131,000 (1,422,000)
Other expenses (income):
Interest expense 76,000 94,000 233,000 248,000
Interest income (18,000) (48,000) (55,000) (144,000)
------------ ------------ ------------- -------------
Earnings (loss) before provision for income taxes 84,000 (642,000) (47,000) (1,526,000)
Provision for income taxes 5,000 4,000 15,000 12,000
------------ ------------ ------------- -------------
Net income (loss) $ 79,000 $ (646,000) $ (62,000) $ (1,538,000)
Earnings (loss) per share $ .03 $ (.25) $ (.02) $ (.59)
------------ ------------ ------------- -------------
Weighted average number of common
and common equivalent shares outstanding 2,590,344 2,590,344 2,590,344 2,590,344
------------ ------------ ------------- -------------
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
-----------------
(unaudited)
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (62,000) $ (1,538,000)
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:
Depreciation and amortization 733,000 557,000
Amortization of deferred compensation 108,000 107,000
Gain on settlement of claim (165,000) ---
Changes in assets and liabilities:
Accounts receivable 161,000 434,000
Inventories (1,905,000) (1,023,000)
Prepaid expenses and other current assets 38,000 (194,000)
Other assets (2,000) 52,000
Accounts payable 381,000 509,000
Accrued expenses and other current liabilities 431,000 (798,000)
-------------- -----------------
Net cash used in operating activities (282,000) (1,894,000)
-------------- -----------------
Cash flows from investing activities:
Purchases or property, plant and equipment (372,000) (430,000)
Net proceeds of sales of marketable securities 279,000 4,165,000
-------------- -----------------
Net cash (used in) provided by investing activities (93,000) 3,735,000
-------------- -----------------
Cash flows from financing activities:
Principal payments on long-term debt (386,000) (409,000)
-------------- -----------------
Net cash used in financing activities (386,000) (409,000)
-------------- -----------------
Net (decrease) increase in cash and cash equivalents (761,000) 1,432,000
Cash and cash equivalents at beginning of period 2,044,000 505,000
-------------- -----------------
Cash and cash equivalents at end of period $ 1,283,000 $ 1,937,000
-------------- -----------------
Supplemental cash flow disclosure:
- ----------------------------------
Cash paid during the period for:
Interest $ 233,000 $ 248,000
Income Taxes $ 15,000 $ 12,000
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(1) General
The accompanying consolidated financial statements for the three and
nine months ended April 30, 1996 and 1995 are unaudited. In the opinion of
management, the information furnished reflects all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of the
results for the unaudited interim periods. The results of operations for the
three and nine months ended April 30, 1996 are not necessarily indicative of the
results of operations to be expected for the full year.
(2) Marketable Investment Securities
Investments are comprised principally of commercial debt obligations and
United States Treasury obligations. The Company utilizes the services of a
financial institution to administer its cash management short term investment
program within parameters established by the Company. The Registrant classifies
its debt and marketable equity securities as available-for-sale securities that
are principally being held for an unspecified period of time, as such, the
Registrant may consider selling them to meet liquidity needs or as part of the
Registrant's risk management program.
Available-for-sale securities are recorded at fair value. Dividend and
interest income are recognized when earned. Realized gains and losses are
included in earnings and are derived using the specific identification method
for determining the cost of securities sold. Unrealized gains and losses are
excluded from earnings and are reported as a separate component of stockholders'
equity until realized.
(3) Accounts Receivable
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
April 30, 1996 July 31, 1995
-------------- -------------
<S> <C> <C>
Accounts receivable from commercial customers $ 3,632,000 $ 3,368,000
Unbilled receivables (including retainages) on
contracts-in-progress 123,000 920,000
Amounts receivable from the United States Government
and its agencies 632,000 339,000
----------------- -----------------
4,387,000 4,627,000
Less allowance for doubtful accounts 58,000 137,000
----------------- -----------------
Accounts receivable, net $ 4,329,000 $ 4,490,000
(4) Inventories
Inventories consist of the following:
<CAPTION>
April 30, 1996 July 31, 1995
-------------- -------------
<S> <C> <C>
Raw materials and components $ 1,663,000 $ 1,437,000
Work-in-process 6,240,000 4,234,000
----------------- -----------------
7,903,000 5,671,000
Less:
Progress payments 373,000 93,000
Inventory reserves 614,000 567,000
----------------- -----------------
Inventories - net $ 6,916,000 $ 5,011,000
</TABLE>
6
<PAGE>
(5) Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
<TABLE>
<CAPTION>
April 30, 1996 July 31, 1995
-------------- -------------
<S> <C> <C>
Customer advances and deposits $ 475,000 $ 321,000
Accrued wages and benefits 623,000 461,000
Accrued commissions 550,000 401,000
Other 558,000 507,000
----------------- -----------------
$ 2,206,000 $ 1,690,000
----------------- -----------------
(6) Long-Term Debt
Long-term debt consists of the following:
<CAPTION>
April 30, 1996 July 31, 1995
-------------- -------------
<S> <C> <C>
Obligations under capital leases $ 2,677,000 $ 2,868,000
Less current installments 606,000 591,000
----------------- -----------------
$ 2,071 000 $ 2,277,000
----------------- -----------------
</TABLE>
(7) Income Taxes
For the nine months ended April 30, 1996 and 1995, the provision for
income taxes was $15,000 and $12,000, respectively.
The provision for income taxes included in the accompanying consolidated
financial statements of operations consisted entirely of estimated state and
local income tax.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at July 31, 1995 are presented below. There
are no temporary differences that give rise to deferred tax liabilities.
Deferred tax asset:
Allowances for doubtful accounts receivable $ 47,000
Inventories, principally due to additional costs inventoried
for tax purposes pursuant to the Tax Reform act of 1986 452,000
Plant and equipment, principally due to capitalized interest
and differences in depreciation 186,000
Compensated absences, principally due to accrual for financial
reporting purposes 195,000
Deferred compensation 94,000
Net operating loss carryforwards 4,294,000
Investment tax credit carryforwards 440,000
Alternative minimum tax credit carryforwards 87,000
Total gross deferred tax assets 5,795,000
Less valuation allowance (5,795,000)
---------------
Net deferred tax assets $ -
---------------
The valuation allowance for deferred tax assets as of July 31, 1995 was
$5,795,000. In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized.
7
<PAGE>
The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers projected future taxable
income and tax planning strategies in making this assessment. In order to fully
realize the deferred tax asset, the Company will need to generate future taxable
income of approximately $16,500,000. Taxable loss for the nine months ended
April 30, 1996 was approximately $30,000. Based upon the level of historical
taxable income and projections for future taxable income over the periods which
the deferred tax assets are deductible, management believes it is more likely
than not the Company will not realize the benefits of these deferred tax assets
and has fully reserved the deferred asset.
(8) Earnings Per Share
Earnings per share are based on the weighted average number of common
and common equivalent shares (if dilutive) outstanding during each year.
8
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
---------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30,
- ----------------------------------------------------------------------------
1996 AND APRIL 30, 1995
- -----------------------
Net Sales. Net sales were $5,263,000 and $4,494,000 for the three months ended
April 30, 1996 and 1995, respectively, representing an increase of $769,000, or
17.1%. This was due primarily to a higher level of sales at Comtech
Communications Corp., and Comtech Microwave Products Corp., partially offset by
lower sales at Comtech Systems, Inc.
Gross Margin. Gross profit was $1,593,000 or 30.3% of net sales for the three
months ended April 30, 1996 compared to $949,000 or 21.1% for the same period in
fiscal 1995. This increase was due primarily to the higher level of sales and to
a lesser extent the gain on the settlement of a claim arising from an earlier
acquisition.
Selling, General and Administrative. Selling, general and administrative
expenses were $1,287,000 or 24.5% of net sales for the three month period ended
April 30, 1996 and $1,233,000 or 27.4% for the same period in fiscal 1995. This
decrease, as a percentage of net sales, was primarily due to the higher level of
sales with only a modest overall increase in expenses.
Research and Development. Research and development expenses were $164,000 and
$312,000 for the three months ended April 30, 1996 and 1995, respectively,
representing a decrease of $148,000, or 47.4%. This decrease was due primarily
to the decrease in these expenses at Comtech Communications Corp. as they moved
from their developmental stage to the production and shipments of their
products.
Results from Operations. As a result of the foregoing factors, the Company had a
net operating profit of $142,000 for the three months ended April 30, 1996
compared to a net operating loss of $596,000 for the comparable prior year
period.
Interest Expense. Interest expense was $76,000 and $94,000 for the three months
ended April 30, 1996 and 1995, respectively. Interest expense for both periods
was attributable largely to interest associated with the Company's capital lease
obligations.
Interest Income. Interest income was $18,000 and $48,000 for the three months
ended April 30, 1996 and 1995, respectively. This decrease was due primarily to
the decrease in the amount of cash available to invest in the fiscal 1996
period.
Provision for Income Taxes. The provision for income taxes was $5,000 and $4,000
for the three months ended April 30, 1996 and 1995, respectively, which
principally relates to state income taxes. The Company files on a consolidated
basis for federal income tax purposes and is not expected to incur federal taxes
for these periods due to losses incurred in earlier periods. The Company
believes its tax benefits are subject to a 100% valuation allowance due to
earnings fluctuations inherent in the Company's operations and the potential
limitations on utilization of loss and credit carryforwards pursuant to Sections
382 and 383 of the Internal Revenue Code of 1986.
9
<PAGE>
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED APRIL 30, 1996
- --------------------------------------------------------------------------------
AND APRIL 30, 1995
- ------------------
Net Sales. Net sales were $14,466,000 and $11,535,000 for the nine months ended
April 30, 1996 and 1995, respectively, representing a $2,931,000, or 25.4%
increase. The increase in sales was due primarily to a higher level of sales at
Comtech Communications Corp.
Gross Margin. Gross profit was $4,341,000 or 30% of net sales and $2,880,000 or
25% of net sales for the nine months ended April 30, 1996 and 1995,
respectively, representing a period-to-period increase of $1,461,000 or 50.7%.
The increase in gross margins due primarily to higher sales and improved gross
profits at Comtech Communications Corp. and to a lesser extent the gain on the
settlement of a claim arising from an earlier acquisition.
Selling, General and Administrative. Selling, general and administrative
expenses were $3,654,000 or 25.3% of net sales for the nine months ended April
30, 1996 and $3,540,000 or 30.7% of net sales for the same period in fiscal
1995. The decrease, as a percentage of net sales, was due primarily to the
higher level of sales with only a modest overall increase in expenses.
Research and Development. Research and development expenses were $556,000 and
$762,000 for the nine months ended April 30, 1996 and 1995, respectively,
representing a decrease of $206,000 or 27%. This decrease was due primarily to
the decrease in these expenses at Comtech Communications Corp. as they moved
from their developmental stage to the production and shipments of their
products.
Results from Operations. As a result of the foregoing factors, the Company had
an operating profit of $131,000 for the nine months ended April 30, 1996
compared to an operating loss of $1,422,000 for the comparable prior year
period.
Interest Expense. Interest expense was $233,000 and $248,000 for the nine month
period ended April 30, 1996 and 1995, respectively. Interest expense for both
periods was mainly attributable to interest associated with the Company's
capital lease obligations.
Interest Income. Interest income was $55,000 and $144,000 for the nine months
ended April 30, 1996 and 1995, respectively. This decrease was due primarily to
the decrease in the amount of cash available to invest in the fiscal 1996
period.
Provision for Income Taxes. The provision for income taxes was $15,000 and
$12,000 for the nine months ended April 30, 1996 and 1995, respectively, which
principally relates to state income taxes. The Company files on a consolidated
basis for federal income tax purposes and is not expected to incur federal taxes
for these periods due to the losses incurred. The Company believes its tax
benefits are subject to a 100% valuation allowance due to earnings fluctuations
inherent in the Company's operations and the potential limitations on
utilization of loss and credit carryforwards pursuant to Sections 382 and 383 of
the Internal Revenue Code of 1986.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of April 30, 1996, the Company's cash and cash equivalents position decreased
by $761,000 from $2,044,000 at July 31, 1995 to $1,283,000 at April 30, 1996.
In April 1996, Company was involved in the settlement of a claim in connection
with a note payable arising from an earlier acquisition. The $250,000 note was
settled for a cash payment of $85,000. Of the $165,000 gain, $149,000 has been
included in cost of sales and $16,000 has been included in selling, general and
administrative expenses.
Operating activities used $282,000 as a result of a net loss as adjusted for
depreciation and other non-cash charges, an increase in inventories and other
assets, partially offset by a decrease in accounts receivable, prepaid expenses
and other current assets and an increase in accounts payable and accrued
expenses and other current liabilities.
10
<PAGE>
Accounts receivable were $4,329,000 at April 30, 1996 as compared to $4,490,000
at July 31, 1995 net of an allowance for doubtful accounts of $58,000 at April
30, 1996 and $137,000 at July 31, 1995. Of these amounts, $4,206,000 and
$3,570,000 represented net amounts due from customers for products and services
rendered as of April 30, 1996 and July 31, 1995, respectively, and the balances
of $123,000 and $920,000, respectively, represented unbilled amounts for sales
recorded on a percentage-of-completion basis as of such dates. The portion of
accounts receivable represented by unbilled accounts receivable will vary at any
time as a function of the volume of contracts being performed by the Company
that are accounted for on a percentage-of-completion basis. The Company believes
that its allowance for doubtful accounts is sufficient based on past experience
and the Company's credit standards. The Company generally requires international
customers to secure their obligations by letter of credit.
Inventory levels of materials and components and work-in-process, net of
progress payments and reserves were $6,916,000 and $5,011,000 at April 30, 1996
and July 31, 1995, respectively. This increase was due primarily to the
additional inventory required to address the increased backlog at April 30, 1996
which was $12,120,000 as compared to $10,242,000 at July 31, 1995. The Company
generally operates on a job-order cost basis, that is, costs are incurred as
work-in-process inventory for specific contracts or "jobs" and, accordingly,
inventory levels will vary as a function of the status of the Company's order
backlog. The Company does have some product lines which require a more
competitive response to customers requirements and require the Company to
provide for a level of "off-the-shelf" equipment. The only other general
inventory that the Company maintains is for basic components which are common
for most of its products.
Accounts payable increased by $381,000, primarily as a result of the increased
purchases needed for the higher inventory level.
Accrued expenses and other current liabilities increased by $431,000 as a result
of increased advances and deposits received from customers, additional accrued
wages and benefits, increased commissions and other expenses.
Investing activities provided $93,000 of cash principally as the result of the
purchase of equipment less the amount provided from the sale of marketable
securities.
Financing activities used $386,000 of cash for principal payments of long term
debt.
The Company has a $4.5 million credit facility which expires on January 31,
1997. The facility is to finance working capital requirements and is available
for direct borrowing and standby letters of credit. Direct borrowings under the
line will bear interest at 1% over the prime rate and are to be secured at the
time of borrowing with collateral satisfactory to the financial institution.
There were minimal borrowings under the Company's credit facility for a one week
period during the nine months ended April 30, 1996. At April 30, 1996, the
Company had letters of credit outstanding, secured by short-term certificates of
deposit in the amount of $228,000, representing the amount of restricted cash.
The Company believes that its current cash position, funds generated from
operations and funds available from its current credit facility, collectively,
are adequate to meet the Company's foreseeable cash requirements.
The Company's cash investments consist of highly liquid interest bearing
commercial debt obligations and U.S. Treasury obligations.
11
<PAGE>
PART II
-------
OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit 11.0
The following exhibit is annexed hereto:
Computation of Earnings (Loss) per Common Share - Page 14
12
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMTECH TELECOMMUNICATIONS CORP.
--------------------------------
(Registrant)
Date: June 12, 1996 By: s/Fred Kornberg
-----------------------
Fred Kornberg
Chairman of the Board
Chief Executive Officer
and President
Date: June 12, 1996 By: s/J. Preston Windus, Jr.
-----------------------
J. Preston Windus, Jr.
Chief Financial Officer
Vice President and Secretary
<PAGE>
Exhibit 11.0
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30 April 30
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings (loss) $ 79,000 $ (646,000) $ (62,000) $ (1,538,000)
- -------------------
Computation of weighted average
number of common equivalent
shares outstanding during the period:
Weighted average number of
common shares 2,605,344 2,605,344 2,605,344 2,605,344
Weighted average shares assumed to be
issued upon exercise of common
stock option --- --- --- ---
Less Treasury Stock (15,000) (15,000) (15,000) (15,000)
---------- ------------ ----------- -------------
Weighted average number of common
and common equivalent shares
outstanding during the period 2,590,344 2,590,344 2,590,344 2,590,344
---------- ------------ ----------- -------------
Earnings (loss) per share: $ .03 $ (.25) $ (.02) $ (.59)
---------- ------------ ----------- -------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS 10-Q 04/30/96 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1995
<PERIOD-END> APR-30-1996
<CASH> 1283
<SECURITIES> 0
<RECEIVABLES> 4387
<ALLOWANCES> 58
<INVENTORY> 6916
<CURRENT-ASSETS> 248
<PP&E> 14206
<DEPRECIATION> 10100
<TOTAL-ASSETS> 17289
<CURRENT-LIABILITIES> 5087
<BONDS> 0
261
0
<COMMON> 0
<OTHER-SE> 9870
<TOTAL-LIABILITY-AND-EQUITY> 17289
<SALES> 14466
<TOTAL-REVENUES> 14466
<CGS> 10125
<TOTAL-COSTS> 14335
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 178
<INCOME-PRETAX> (47)
<INCOME-TAX> 15
<INCOME-CONTINUING> (62)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (62)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
