<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 January 31, 1997
-------------------------------------------------------
( ) 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)
<TABLE>
<S> <C>
Delaware 11-2139466
-------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer 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)
</TABLE>
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 - 2,642,404 shares outstanding as of
- ---------------------------------------------------------------------------
1/31/97.
- --------
1
<PAGE>
INDEX
-----
Page
No.
----
PART I FINANCIAL INFORMATION
Consolidated Balance Sheets - 3
January 31, 1997 (unaudited) and
July 31, 1996
Consolidated Statements of Operations - 4
Three Months and Six Months Ended
January 31, 1997 and 1996 (unaudited)
Consolidated Statements of Cash Flows - 5
Six Months Ended January 31, 1997 and 1996
(unaudited)
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
PART II OTHER INFORMATION 11
Exhibit 11.0 Computation of Earnings (Loss) Per
Common Share 12
Signature Page 13
2
<PAGE>
PART I
------
FINANCIAL INFORMATION
---------------------
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
---------------- -------------
(unaudited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 1,629,000 $ 1,840,000
Restricted cash 90,000 220,000
Accounts receivable, less allowance for doubtful
accounts of $68,000 at January 31, 1997
and $28,000 at July 31, 1996 3,893,000 3,467,000
Inventories, net 6,646,000 6,527,000
Prepaid expenses and other current assets 187,000 196,000
------------ ------------
Total current assets 12,445,000 12,250,000
------------ ------------
Property, plant and equipment, net 3,699,000 3,996,000
Other assets 351,000 383,000
------------ ------------
Total assets $ 16,495,000 $ 16,629,000
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current installments of long-term debt (including
payable to related party of $368,000 at January 31,
1997 and $351,000 at July 31, 1996) $ 620,000 $ 642,000
Accounts payable 2,105,000 2,037,000
Accrued expenses and other current liabilities 1,583,000 1,774,000
------------ ------------
Total current liabilities 4,308,000 4,453,000
------------ ------------
Long-term debt, less current installments (including
payable to related party of $1,324,000 at January 31, 1997
and $1,512,000 at July 31, 1996) 1,619,000 1,875,000
------------ ------------
Total liabilities 5,927,000 6,328,000
------------ ------------
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 2,642,404
shares at January 31, 1997 and 2,607,344 at July 31, 1996 264,000 261,000
Additional paid-in capital 22,267,000 22,235,000
Accumulated deficit (11,370,000) (11,599,000)
------------ ------------
11,161,000 10,897,000
Less:
Treasury stock (55,000 shares at January 31, 1997 and 15,000
shares at July 31, 1996) (184,000) (180,000)
Deferred compensation expense (409,000) (416,000)
------------ ------------
10,568,000 10,301,000
Total liabilities and stockholders' equity $ 16,495,000 $ 16,629,000
------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31 January 31,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 6,048,000 $ 4,747,000 $ 11,236,000 $ 9,203,000
Operating costs and expenses:
Cost of sales 4,426,000 3,313,000 8,233,000 6,455,000
Selling, general and administrative 1,212,000 1,163,000 2,283,000 2,367,000
Research and development 229,000 157,000 458,000 392,000
----------- ----------- ------------ -----------
Total operating costs and expenses 5,867,000 4,633,000 10,974,000 9,214,000
----------- ----------- ------------ -----------
Operating earnings (loss) 181,000 114,000 262,000 (11,000)
Other (expenses) income:
Interest expense (72,000) (86,000) (148,000) (157,000)
Interest income 4,000 20,000 13,000 37,000
Other income 45,000 -- 117,000 --
----------- ----------- ------------ -----------
Earnings (loss) from operations
before provision for income taxes 158,000 48,000 244,000 (131,000)
Provision for income taxes 10,000 3,000 15,000 10,000
----------- ----------- ------------ -----------
Net income (loss) $ 148,000 $ 45,000 $ 229,000 $ (141,000)
----------- ----------- ------------ -----------
Earnings (loss) per share $ .06 $ .02 $ .09 $ (.05)
----------- ----------- ------------ -----------
Weighted average number of common
and common equivalent shares
outstanding 2,582,384 2,590,344 2,582,384 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>
Six Months Ended
January 31,
-------------------------
(unaudited)
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 229,000 $ (141,000)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Gain on sale of property (72,000)
Depreciation and amortization 526,000 482,000
Amortization (reversal) of deferred compensation expense net (46,000) 72,000
Changes in assets and liabilities:
Accounts receivable (426,000) (166,000)
Inventories (119,000) (970,000)
Prepaid expenses and other current assets 9,000 (67,000)
Other assets (8,000) (17,000)
Accounts payable 68,000 (155,000)
Accrued expenses and other current liabilities (191,000) 521,000
----------- -----------
Net cash used in operating activities (30,000) (441,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (200,000) (148,000)
Sale of property, plant and equipment 127,000 --
Net proceeds of sales of marketable securities -- 278,000
----------- -----------
Net cash (used in) provided by investing activities (73,000) 130,000
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (322,000) (349,000)
Proceeds from exercise of stock options 88,000 --
Purchase of treasury stock (4,000) --
----------- -----------
Net cash used in financing activities (238,000) (349,000)
Net decrease in cash and cash equivalents (341,000) (660,000)
Cash and cash equivalents at beginning of period 2,060,000 2,044,000
----------- -----------
Cash and cash equivalents at end of period $ 1,719,000 $ 1,384,000
----------- -----------
Supplemental cash flow disclosure:
- ---------------------------------
Cash paid during the period for:
Interest $ 148,000 $ 157,000
Income taxes $ 15,000 $ 10,000
</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 six months
ended January 31, 1997 and 1996 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 six months ended
January 31, 1997 are not necessarily indicative of the results of operations to
be expected for the full year.
(2) Accounts Receivable
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
---------------- -------------
<S> <C> <C>
Accounts receivable from commercial customers $ 3,336,000 $ 2,079,000
Unbilled receivables (including retainages) on
contracts-in-progress 376,000 689,000
Amounts receivable from the United States Government
and its agencies 249,000 727,000
----------- -----------
3,961,000 3,495,000
Less allowance for doubtful accounts 68,000 28,000
----------- -----------
Accounts receivable, net $ 3,893,000 $3,467,000
----------- -----------
</TABLE>
(3) Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
---------------- -------------
<S> <C> <C>
Raw materials and components $ 1,816,000 $1,754,000
Work-in-process 6,372,000 5,414,000
----------- -----------
8,188,000 7,168,000
Less:
Progress payments 865,000 151,000
Inventory reserves 677,000 490,000
----------- -----------
Inventories - net $ 6,646,000 $6,527,000
----------- -----------
</TABLE>
(4) Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
following:
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
---------------- -------------
<S> <C> <C>
Customer advances and deposits $ 276,000 $ 208,000
Accrued wages and benefits 564,000 680,000
Accrued commissions 299,000 355,000
Other 444,000 531,000
----------- -----------
$ 1,583,000 $1,774,000
----------- -----------
</TABLE>
6
<PAGE>
(5) Long-Term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
---------------- -------------
<S> <C> <C>
Obligations under capital leases $ 2,239,000 $ 2,517,000
Less current installments 620,000 642,000
------------------ ------------------
$ 1,619 000 $ 1,875,000
------------------ ------------------
</TABLE>
(6) Income Taxes
For the six months ended January 31, 1997 and 1996, the provision for
income taxes was $15,000 and $10,000, 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, 1996 are presented below. There
are no temporary differences that give rise to deferred tax liabilities.
Deferred tax asset:
1996
----
Allowances for doubtful accounts receivable $ 10,000
Inventories, principally due to additional costs inventoried
for tax purposes pursuant to the Tax Reform act of 1986 374,000
Plant and equipment, principally due to capitalized interest
and differences in depreciation 156,000
Compensated absences, principally due to accrual for financial
reporting purposes 213,000
Deferred compensation 144,000
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 5,718,000
Less valuation allowance (5,718,000)
-----------
Net deferred tax assets $ --
-----------
The valuation allowance for deferred tax assets as of July 31, 1996 was
$5,718,000. 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.
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. 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.
(7) 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.
7
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
---------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Forward-Looking Statements
--------------------------
Certain information contained in this Quarterly Report on Form 10-Q,
including, without limitation, information appearing under Part I, Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," are forward-looking statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934). Factors set forth in the Company's Annual Report on Form 10-K, filed
October 31, 1996, or in the Company's other Securities and Exchange Commission
filings, could affect the Company's actual results and could cause the Company's
actual results to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company in this Quarterly Report on
Form 10-Q.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31,
- ------------------------------------------------------------------------------
1997 AND JANUARY 31, 1996
- -------------------------
Net Sales. Net sales were $6,048,000 and $4,747,000 for the three months ended
January 31, 1997 and 1996, respectively, representing an increase of $1,301,000,
or 27.4%. This increase was due primarily to a higher level of sales of solid
state amplifiers and satellite frequency converter products at the Company's
Comtech PST Corp., and Comtech Communications Corp. subsidiaries, respectively.
Gross Margin. Gross profit was $1,622,000 or 26.8% of net sales for the three
months ended January 31, 1997 compared to $1,434,000 or 30.2% of net sales for
the same period in fiscal 1996. Higher gross profits in the fiscal 1997 period
were due primarily to the higher sales volume. Lower gross profit margins, as a
percentage of sales, in the 1997 period were due primarily to lower gross
margins at Comtech Systems, Inc. and to a lesser extent lower gross margins at
Comtech Communications Corp.
Selling, General and Administrative. Selling, general and administrative
expenses were $1,212,000 or 20.0% of net sales for the three months ended
January 31, 1997 compared to $1,163,000 or 24.5% of net sales for the same
period in fiscal 1996. The increased expense was primarily due to the addition
to the allowance for bad debts expense.
Research and Development. Research and development expenses were $229,000 and
$157,000 for the three months ended January 31, 1997 and 1996, respectively,
representing a $72,000, or 45.9% increase. This increase was due primarily to
expenses for product improvements at the Company's Comtech PST Corp. and Comtech
Systems Inc. subsidiaries, respectively, which was partially offset by a
decrease in these expenses at Comtech Antenna Systems Inc.
Results from Operations. As a result of the foregoing factors, the Company had
operating earnings of $181,000 for the three months ended January 31, 1997
compared to operating earnings of $114,000 for the comparable prior year period.
Interest Expense. Interest expense was $72,000 and $86,000 for the three months
ended January 31, 1997 and 1996, respectively. Interest expense for both periods
was attributable largely to interest associated with the Company's capital lease
obligations.
Interest Income. Interest income was $4,000 and $20,000 for the three months
ended January 31, 1997 and 1996, respectively. This decrease was due primarily
to the decrease in the amount of cash available to invest in the fiscal 1997
period.
Other Income. Other income in the fiscal 1997 period is primarily due to a
finders fee the Company earned relating to an agreement with a foreign original
equipment manufacturer.
8
<PAGE>
Provision for Income Taxes. The provision for income taxes was $10,000 and
$3,000 for the three months ended January 31, 1997 and 1996, 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 previous 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.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31,
- ----------------------------------------------------------------------------
1996 AND JANUARY 31, 1996
- -------------------------
Net Sales. Net sales were $11,236,000 and $9,203,000 for the six months ended
January 31, 1997 and 1996, respectively, representing an increase of $2,033,000
or 22.1%. The increase in sales was due primarily to a higher level of sales of
solid state amplifiers and satellite frequency converters at Comtech PST Corp.
and Comtech Communications Corp., respectively.
Gross Margin. Gross profit was $3,003,000 or 26.7% of net sales for the six
months ended January 31, 1997 compared to $2,748,000 or 29.9% of net sales for
the same period in fiscal 1996. Higher gross profits in the fiscal 1997 period
were due primarily to the higher sales volume. Lower gross profit margins, as a
percentage of net sales, in the 1997 period were due primarily to lower gross
margins at Comtech Systems, Inc. and Comtech Communications Corp.
Selling, General and Administrative. Selling, general and administrative
expenses were $2,283,000 or 20.3% for the six months ended January 31, 1997
compared to $2,367,000 or 25.7% of net sales for the same period in fiscal 1996.
This reduction was due primarily to the forfeiture of certain benefits by a
former employee relating to a restricted stock purchase agreement, which
resulted in a reduction of $79,000 to administrative expenses.
Research and Development. Research and development expenses were $458,000 and
$392,000 for the six months ended January 31, 1997 and 1996, respectively,
representing a $66,000 or 16.8% increase. This increase was due primarily to
expenses for product improvements at the Company's Comtech PST Corp. and Comtech
Systems, Inc. subsidiaries which was partially offset by a decrease in these
expenses at Comtech Antenna Systems, Inc.
Results From Operations. As a result of the foregoing factors, the Company had
operating earnings of $262,000 for the six months ended January 31, 1997
compared to an operating loss of $11,000 for the comparable prior year period.
Interest Expense. Interest expense was $148,000 and $157,000 for the six months
ended January 31, 1997 and 1996, respectively. Interest expense for both periods
was attributable largely to interest associated with the Company's capital lease
obligations.
Interest Income. Interest income was $13,000 and $37,000 for the six months
ended January 31, 1997 and 1996, respectively. This decrease was due primarily
to the decrease in the amount of cash available to invest in the fiscal 1997
period.
Other Income. Other income in the fiscal 1997 period was primarily the result of
the gain on the sale of a storage facility and a finders fee the Company earned
relating to an agreement with a foreign original equipment manufacturer.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
For the six month period ended January 31, 1997, the Company's cash and cash
equivalent position decreased by $341,000 from $2,060,000 at July 31, 1996 to
$1,719,000 at January 31, 1997.
9
<PAGE>
Operating activities used a net of $30,000. Accounts receivable were $3,893,000
at January 31, 1997 as compared to $3,467,000 at July 31, 1996, representing an
increase of $426,000. This increase was primarily the result of the increase in
sales. Included in these balances were $376,000 and $689,000 for January 31,
1997 and 1996, respectively for unbilled accounts receivable for sales recorded
on a percentage-of-completion basis. The portion of accounts receivable that are
accounted for on a percentage-of-completion basis 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 $6,646,000 at January 31, 1997 and
$6,527,000 at July 31, 1996, representing an increase of $119,000. This increase
was due primarily to the additional inventory required to address the increased
backlog at January 31, 1997. 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 $68,000, from July 31, 1996 to January 31, 1997
primarily as a result of the increased sales volume requiring increased
inventory purchases.
Accrued expenses and other current liabilities decreased by $191,000 as a result
of decreases in accrued wages and benefits, accrued commissions and other
expenses, partially offset by an increase in customer advance payments.
Investing activities used $73,000 of cash. The Company used $200,000 of cash for
purchases of equipment. It received $127,000 as proceeds from the sale of a
storage facility it previously owned and recognized a $72,000 profit from the
sale which is included as other income.
Financing activities used $238,000. The Company received $88,000 as proceeds
from the exercise of employee incentive stock options. Principal payments on
long term debt were $322,000. Additionally, the Company purchased forfeited
restricted employee stock which has been added to the Company's treasury stock.
In December 1996 the Company obtained a new $5,000,000 secured credit facility
from Republic National Bank of New York. The line of credit which is to be used
for working capital requirements is for a term of one year and bears interest on
borrowings of 1/2% over the bank's Reference Rate. There were no borrowings
outstanding at January 31, 1997. A component of this facility is the
administration by Republic of $1,000,000 of loans under the Working Capital
Guarantee Program of the Export-Import Bank of the United States. This program
provides the lender a 90% guarantee on qualifying loans made to the Company for
export related contracts. The Company has not utilized this program to date.
The Company believes that its current cash position, funds generated from
operations and funds available from its credit facility, collectively, would be
adequate to meet the Company's cash requirements.
10
<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
11
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11.0
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
-----------------------------------------------
(Unaudited)
Three Months Ended Six Months Ended
January 31, January 31,
--------------------- ---------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings (loss) $ 148,000 $ 45,000 $ 229,000 $ (141,000)
----------- ----------- ----------- ------------
Computation of weighted average
number of common equivalent
shares outstanding during the period:
Weighted average number of
common shares 2,637,384 2,605,344 2,637,384 2,605,344
Weighted average shares assumed to be
issued upon exercise of common
stock options -- -- -- --
Less Treasury Stock (55,000) (15,000) (55,000) (15,000)
------------ ------------ ------------ ------------
Weighted average number of common
and common equivalent shares
outstanding during the period 2,582,384 2,590,344 2,582,344 2,590,344
----------- ----------- ----------- -----------
Earnings (loss) per share: $ .06 $ .02 $ .09 $ (.05)
----------- ----------- ----------- ------------
</TABLE>
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: March 14, 1997 By:
--------------------------
Fred Kornberg
Chairman of the Board
Chief Executive Officer
and President
Date: March 14, 1997 By:
--------------------------
J. Preston Windus, Jr.
Vice President, Chief Financial
Officer and Secretary
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED FINANCIAL STATEMENTS FORM 10Q 01/31/97 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JAN-31-1997
<EXCHANGE-RATE> 1
<CASH> 1,719
<SECURITIES> 0
<RECEIVABLES> 3,961
<ALLOWANCES> 68
<INVENTORY> 6,646
<CURRENT-ASSETS> 12,445
<PP&E> 14,212
<DEPRECIATION> 10,513
<TOTAL-ASSETS> 16,495
<CURRENT-LIABILITIES> 4,308
<BONDS> 0
0
0
<COMMON> 264
<OTHER-SE> 10,304
<TOTAL-LIABILITY-AND-EQUITY> 16,495
<SALES> 11,236
<TOTAL-REVENUES> 11,236
<CGS> 8,233
<TOTAL-COSTS> 10,974
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 148
<INCOME-PRETAX> 244
<INCOME-TAX> 15
<INCOME-CONTINUING> 229
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 229
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
