<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, 1998
----------------------------------------------------
( ) 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 Identification Number)
incorporation or organization)
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 - 2,654,404 shares outstanding as of
---------------------------------------------------------------------------
02/28/98.
---------
<PAGE>
COMTECH TELECOMMUNICATIONS CORP.
--------------------------------
INDEX
-----
Page
No.
----
PART I FINANCIAL INFORMATION
Consolidated Balance Sheets - 3
January 31, 1998 (unaudited) and
July 31, 1997
Consolidated Statements of Operations - 4
Three Months and Six Months Ended
January 31, 1998 and 1997 (unaudited)
Consolidated Statements of Cash Flows - 5
Six Months Ended January 31, 1998 and 1997
(unaudited)
Notes to Consolidated Financial Statements 6-7
Management's Discussion and Analysis of 8-10
Financial Condition and Results of Operations
PART II OTHER INFORMATION 11
Exhibit 11.0 Computation of Earnings Per 12
Common Share
Exhibit 27.1 Financial Data Schedule
Signature Page 13
<PAGE>
PART I
------
FINANCIAL INFORMATION
---------------------
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
January 31, 1998 July 31, 1997
----------------- --------------
(unaudited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 1,564,000 $ 1,274,000
Restricted cash 22,000 90,000
Accounts receivable, less allowance for doubtful
accounts of $89,000 at January 31, 1998
and $102,000 at July 31, 1997 5,987,000 5,551,000
Inventories, net 7,481,000 6,556,000
Prepaid expenses and other current assets 321,000 231,000
------------ ------------
Total current assets 15,375,000 13,702,000
------------ ------------
Property, plant and equipment, net 4,012,000 3,898,000
Other assets 334,000 360,000
------------ ------------
Total assets $ 19,721,000 $ 17,960,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current installments of long-term debt (including
payable to related party of $360,000 at January 31,
1998 and $386,000 at July 31, 1997) $ 635,000 $ 606,000
Notes Payable 378,000 -
Accounts payable 2,834,000 2,865,000
Accrued expenses and other current liabilities 3,076,000 2,301,000
------------ ------------
Total current liabilities 6,923,000 5,772,000
------------ ------------
Long-term debt, less current installments
(including payable to related party of $964,000
at January 31, 1998 and $1,126,000 at July 31, 1997) 1,482,000 1,310,000
------------ ------------
Total liabilities 8,405,000 7,082,000
------------ ------------
Stockholders' equity:
Preferred stock, par value $.10 per share; shares
authorized and unissued 2,000,000 - -
Common stock, par value $.10 per share; authorized
15,000,000 shares; issued and outstanding 2,652,404
shares at January 31, 1998 and 2,650,404 at July 31, 19 97 265,000 265,000
Additional paid-in capital 22,132,000 22,127,000
Accumulated deficit (10,694,000) (11,115,000)
------------ ------------
Less:
Treasury stock (55,000 shares at January 31, 1998 and
July 31, 1997) (184,000) (184,000)
Deferred compensation expense (203,000) (215,000)
------------ ------------
11,316,000 10,878,000
------------ ------------
Total liabilities and stockholders' equity $ 19,721,000 $ 17,960,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31 January 31,
------------------------ ------------------------
<S> <C> <C> <C> <C>
1998 1997 1998 1997
Unaudited Unaudited Unaudited Unaudited
---------- ---------- ----------- -----------
Net sales $7,700,000 $6,048,000 $13,634,000 11,236,000
---------- ---------- ----------- -----------
Operating costs and expenses:
Cost of sales 5,570,000 4,426,000 9,610,000 8,233,000
Selling, general and administrative 1,299,000 1,212,000 2,728,000 2,283,000
Research and development 323,000 229,000 590,000 458,000
---------- ---------- ----------- -----------
Total operating costs and expenses 7,192,000 5,867,000 12,928,000 10,974,000
---------- ---------- ----------- -----------
Operating earnings 508,000 181,000 706,000 262,000
Other (expenses) income:
Interest expense (150,000) (72,000) (228,000) (148,000)
Interest income 3,000 4,000 9,000 13,000
Other income 1,000 45,000 4,000 117,000
---------- ---------- ----------- -----------
Earnings from operations
before provision for income taxes 362,000 158,000 491,000 244,000
Provision for income taxes 45,000 10,000 70,000 15,000
---------- ---------- ----------- -----------
Net income $ 317,000 $ 148,000 $ 421,000 $ 229,000
========== ========== =========== ===========
Basic and Diluted earnings per share $.12 $.06 $.16 $.09
========== ========== =========== ===========
Weighted average number of common
and common equivalent shares
outstanding 2,644,433 2,582,384 2,644,433 2,582,384
========== ========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
January 31,
-----------------------------------------------------
(unaudited)
<S> <C> <C>
1998 1997
---------- ----------
Cash flows from operating activities:
Net income $ 421,000 $ 229,000
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Gain on sale of property - (72,000)
Depreciation and amortization 594,000 526,000
Amortization (reversal) of deferred compensation expense net 12,000 (46,000)
Changes in assets and liabilities:
Accounts receivable (436,000) (426,000)
Inventories (925,000) (119,000)
Prepaid expenses and other current assets (90,000) 9,000
Other assets (2,000) (8,000)
Accounts payable (31,000) 68,000
Accrued expenses and other current liabilities 775,000 (191,000)
---------- ----------
Net cash provided by (used in) operating activities 318,000 (30,000)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (175,000) (200,000)
Sale of property, plant and equipment - 127,000
---------- ----------
Net cash (used in) investing activities (175,000) (73,000)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable 378,000 -
Principal payments on long-term debt (304,000) (322,000)
Proceeds from exercise of stock options 5,000 88,000
Purchase of treasury stock - (4,000)
---------- ----------
Net cash provided by (used in) financing activities 79,000 (238,000)
---------- ----------
Net increase (decrease) in cash and cash equivalents 222,000 (341,000)
Cash and cash equivalents at beginning of period 1,364,000 2,060,000
---------- ----------
Cash and cash equivalents at end of period $1,586,000 $1,719,000
========== ==========
Supplemental cash flow disclosure:
- ----------------------------------
Cash paid during the period for:
Interest $ 158,000 $ 148,000
Income taxes $ 50,000 $ 15,000
</TABLE>
Non Cash Items:
- --------------
The Company entered into new capital lease agreements in the amounts of $505,000
for the period ended January 31, 1998 and $44,000 for the period ended January
31, 1997
See accompanying notes to consolidated financial statements.
<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, 1998 and 1997 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, 1998 are not necessarily indicative of the results of operations to
be expected for the full year.
<TABLE>
<CAPTION>
<S> <C>
(2) Accounts Receivable
-------------------
Accounts receivable consist of the following:
January 31, 1998 July 31, 1997
---------------- -------------
<S> <C> <C>
Accounts receivable from commercial customers $5,133,000 $4,416,000
Unbilled receivables (including retainages) on
contracts-in-progress 771,000 384,000
Amounts receivable from the United States government
and its agencies 172,000 853,000
---------- ----------
6,076,000 5,653,000
Less allowance for doubtful accounts 89,000 102,000
---------- ----------
Accounts receivable, net $5,987,000 $5,551,000
========== ==========
(3) Inventories
-----------
Inventories consist of the following:
January 31, 1998 July 31, 1997
---------------- -------------
<S> <C> <C>
Raw materials and components $3,565,000 $2,276,000
Work-in-process 6,143,000 6,025,000
---------- ----------
9,708,000 8,301,000
Less:
Progress payments 1,016,000 789,000
Inventory reserves 1,211,000 956,000
---------- ----------
Inventories - net $7,481,000 $6,556,000
========== ==========
(4) Accrued Expenses and Other Current Liabilities
----------------------------------------------
Accrued expenses and other current liabilities consist of the following:
January 31, 1998 July 31, 1997
----------------- ------------
Customer advances and deposits $1,312,000 $ 406,000
Accrued wages and benefits 754,000 937,000
Accrued commissions 653,000 413,000
Accrued contract costs 231,000 -
Other 726,000 545,000
---------- ----------
$3,676,000 $2,301,000
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(5) Long-Term Debt
--------------
Long-term debt consists of the following:
January 31, 1998 July 31, 1997
---------------- -------------
<S> <C> <C>
Obligations under capital leases $2,117,000 $1,916,000
Less current installments 635,000 606,000
---------- ----------
$1,482,000 $1,310,000
========== ==========
</TABLE>
(6) Earnings Per Share
------------------
The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings per Share". The statement requires companies to present
basic and diluted earnings per share ("EPS"), instead of primary and fully
diluted EPS that were previously required. Basic earnings per share are
computed based on the weighted average number of shares outstanding. Diluted
EPS reflects the maximum dilution from potential common stock issuable pursuant
to the exercise of stock options and warrants, if dilutive, outstanding during
each period. All EPS figures for prior periods reported have been restated.
<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 29, 1997, 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,
- ------------------------------------------------------------------------------
1998 AND JANUARY 31, 1997
- -------------------------
Net Sales. Net sales were $7,700,000 and $6,048,000 for the three months ended
January 31, 1998 and 1997, respectively, representing an increase of $1,652,000,
or 27.3%. This increase was due primarily to a higher volume of sales of
products at Comtech PST Corp., partially offset by results at Comtech
Communications Corp.
Gross Margin. Gross profit was $2,130,000 or 27.7% of net sales for the three
months ended January 31, 1998 compared to $1,622,000 or 26.8% of net sales for
the same period in fiscal 1997. Higher gross profits in the fiscal 1998 period
were due primarily to the higher sales volume and higher gross profit margins,
as a percentage of sales, at Comtech PST Corp.
Selling, General and Administrative. Selling, general and administrative
expenses were $1,299,000 or 16.9% of net sales for the three months ended
January 31, 1998 compared to $1,212,000 or 20.0% of net sales for the same
period in fiscal 1997, representing an increase of $87,000. The increase was
primarily due to the additional expenses required to support the higher sales
volume.
Research and Development. Research and development expenses were $323,000 and
$229,000 for the three months ended January 31, 1998 and 1997, respectively,
representing a $94,000, or 41.0% increase. This increase was due primarily to
expenses for general product improvements and expanded product development at
Comtech Communications Corp.
Results from Operations. As a result of the foregoing factors, the Company had
operating earnings of $508,000 for the three months ended January 31, 1998
compared to operating earnings of $181,000 for the comparable prior year period.
Interest Expense. Interest expense was $150,000 and $72,000 for the three
months ended January 31, 1998 and 1997, respectively. Interest expense for both
periods was attributable largely to interest associated with the Company's
capital lease obligations.
Interest Income. Interest income was $3,000 and $4,000 for the three months
ended January 31, 1998 and 1997, respectively. This decrease was due primarily
to the decrease in the amount of cash available to invest in the fiscal 1998
period.
Other Income. Other income was $1,000 and $45,000 for the three months ended
January 31, 1998 and 1997, respectively. In fiscal 1998, this income was from
the sale of scrap materials. Other income in the fiscal 1997 period was from a
finder's fee the Company earned relating to an agreement with a foreign original
equipment manufacturer.
<PAGE>
Provision for Income Taxes. The provision for income taxes was $45,000 and
$10,000 for the three months ended January 31, 1998 and 1997, 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,
- ----------------------------------------------------------------------------
1998 AND JANUARY 31, 1997
- -------------------------
Net Sales. Net sales were $13,634,000 and $11,236,000 for the six months ended
January 31, 1998 and 1997, respectively, representing an increase of $2,398,000
or 21.3%. The increase in sales was due primarily to a higher volume of sales
of products at Comtech PST Corp., partially offset by results at Comtech
Communications Corp.
Gross Margin. Gross profit was $4,024,000 or 29.5% of net sales for the six
months ended January 31, 1998 compared to $3,003,000 or 26.7% of net sales for
the same period in fiscal 1997. Higher gross profits in the fiscal 1998 period
were due primarily to the higher sales volume and higher gross profit margins,
as a percentage of net sales, at Comtech PST Corp.
Selling, General and Administrative. Selling, general and administrative
expenses were $2,728,000 or 20.0% for the six months ended January 31, 1998
compared to $2,283,000 or 20.3% of net sales for the same period in fiscal 1997.
The increase was due primarily to the additional expenses required to support
the higher sales volume. The fiscal 1997 period reflected a reduction to
administrative expenses that resulted from the forfeiture of certain benefits by
a former employee.
Research and Development. Research and development expenses were $590,000 and
$458,000 for the six months ended January 31, 1998 and 1997, respectively,
representing an increase of $132,000 or 28.8%. This increase was due primarily
to expenses for general product improvements and expanded product development at
Comtech Communications Corp.
Results From Operations. As a result of the foregoing factors, the Company had
operating earnings of $706,000 and $262,000 for the six months ended January 31,
1998 and 1997, respectively.
Interest Expense. Interest expense was $228,000 and $148,000 for the six months
ended January 31, 1998 and 1997, respectively. Interest expense for both
periods was attributable largely to interest associated with the Company's
capital lease obligations.
Interest Income. Interest income was $9,000 and $13,000 for the six months
ended January 31, 1998 and 1997, respectively. This decrease was due primarily
to the decrease in the amount of cash available to invest in the fiscal 1998
period.
Other Income. Other income was $4,000 and $117,000 for the six months ended
January 1998 and 1997, respectively. In fiscal 1998, this income was from the
sale of scrap materials and the proceeds from the sale of fully depreciated
equipment. In fiscal 1997, other income was primarily the result of the gain on
the sale of a storage facility and from a finders fee the Company earned
relating to an agreement with a foreign original equipment manufacturer.
Provision for Income Taxes. The provision for income taxes was $70,000 and
$15,000 for the three months ended January 31, 1998 and 1997, 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.
<PAGE>
LIQUITY AND CAPITAL RESOURCES
- -----------------------------
For the six month period ended January 31, 1998, the Company's cash and cash
equivalent position increased by $222,000 from $1,364,000 at July 31, 1997 to
$1,586,000 at January 31, 1998. Operating activities provided $318,000 of cash,
investing activities used $175,000 of cash and financing activities provided
$79,000 of cash.
The increase in accounts receivable of $436,000 was primarily due to the timing
of the shipments. The allowance for doubtful accounts decreased by $13,000 due
to the write off of receivables deemed to be uncollectible. The Company reviews
its allowance for doubtful accounts periodically and believes that it is
sufficient based on past experience and the Company's credit standards.
Generally, foreign customers are required to secure their obligations by letter
of credit.
Inventory increased by $925,000, primarily due to the increased backlog and to
the timing of material purchases. 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 Company's order backlog. The Company does have some product
lines which require a more competitive delivery 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. Inventory reserves
are reviewed on an ongoing basis and adjustments are made as needed.
Accounts payable decreased by $31,000 primarily due to the increase of available
cash for the period. Accrued expenses and other current liabilities increased
primarily due to the increases in advance payments from customers, accrued
commissions and accrued contract costs. The Company purchased property plant
and equipment of $680,000 of which approximately $505,000 was financed by
capital leases. Long term debt increased by $201,000, this was the net result
of the addition of $505,000 from the aforementioned capital equipment purchases,
offset by the payments of $304,000 made on existing capital leases.
Notes payable was $378,000 at January 31, 1998 which was the net amount of
borrowings outstanding on the Company's line of credit under the Working Capital
Guarantee Program of the Export-Import Bank of the United States. This program,
which is administered by Republic National Bank of New York, provides the lender
a 90% guarantee of qualifying loans of up to $1,000,000, made to the Company for
export related contracts. This is a component of the total secured credit
facility of $6,000,000 from Republic National Bank of New York. The line bears
interest on borrowings of 1/2% over the Bank's Reference Rate. The credit
facility, which is for a one year period, expires on December 31, 1998.
The Company believes that its current cash position, funds generated from
operations and funds available from the credit facility, collectively, would be
adequate to meet the Company's foreseeable cash requirements.
<PAGE>
PART II
-------
OTHER INFORMATION
-----------------
Item 4. Results of Votes of Security Holders
------------------------------------
(1) At the Company's Annual Stockholders' Meeting held on December 16,
1997, Dr. George Buliarello and Mr. Richard L. Goldberg were reelected
as Directors for a three year term. The votes were as follows: Dr.
Bugliarello - votes for 2,245,655; votes withheld 133,724. Mr.
Goldberg - votes for 2,247,741; votes withheld 131,638. Mr. Fred
Kornberg and Mr. Sol S. Weiner continued on as Directors for a term
expiring in one year and Mr. Gerard R. Nocita and Dr. John B. Payne
for a term expiring in two years.
The stockholders approved the selection of KPMG Peat Marwick LP as
auditors by a vote of 2,334,947 shares for and 29,031 shares against
with 15,401 shares abstaining.
The stockholders approved a proposal to amend the Certificate of
Incorporation increasing the number of authorized shares of common
stock from 10,000,000 to 15,000,000 by a vote of 2,179,831 shares for
and 226,927 shares against with 6,621 shares abstaining.
The stockholders approved a proposal to amend to the Company's 1993
Incentive Stock Option Plan to increase the number of shares of Common
Stock that may be granted from 245,000 to 695,000 and to conform the
Plan to Section 162(m) of the Internal Revenue Code and to changes in
Rule 16b-3 promulgated by the Securities Exchange Act of 1934 by a
vote of 790,639 shares for and 602,208 shares against with 22,645
shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit 11.0
The following exhibit is annexed hereto:
Computation of Earnings per Common Share - Page 12
(b) Exhibit 27.1 Financial Data Schedule.
<PAGE>
Exhibit 11.0
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
-------------------------------------------------
COMPUTATION OF EARNINGS PER COMMON SHARE
----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
----------------------- ----------------------
1998 1997 1998 1997
---------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net earnings $ 317,000 $ 148,000 $ 421,000 $ 229,000
- ------------ ========== ========== ========== ==========
Computation of weighted average
number of common equivalent
shares outstanding during the period:
Weighted average number of
common shares 2,650,404 2,637,384 2,650,404 2,637,384
Weighted average shares assumed to be
issued upon exercise of common
stock options 49,029 --- 49,029 ---
Less Treasury Stock (55,000) (55,000) (55,000) (55,000)
---------- ---------- ---------- ----------
Weighted average number of common
and common equivalent shares
outstanding during the period 2,644,433 2,582,384 2,644,433 2,582,344
========== ========== ========== ==========
Basic and Diluted earnings per share $ .12 $ .06 $ .16 $ .09
- ------------------------------------ ========== ========== ========== ==========
</TABLE>
<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 11, 1998 By: ___________________________
Fred Kornberg
Chairman of the Board
Chief Executive Officer
and President
Date: March 11, 1998 By:_____________________________
J.Preston Windus, Jr.
Vice President, Chief Financial
Officer and Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS FORM 10Q - 01/31/98 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 1,586
<SECURITIES> 0
<RECEIVABLES> 6,076
<ALLOWANCES> 89
<INVENTORY> 7,481
<CURRENT-ASSETS> 15,375
<PP&E> 15,599
<DEPRECIATION> 11,587
<TOTAL-ASSETS> 19,721
<CURRENT-LIABILITIES> 6,923
<BONDS> 0
0
0
<COMMON> 265
<OTHER-SE> 11,051
<TOTAL-LIABILITY-AND-EQUITY> 19,721
<SALES> 13,634
<TOTAL-REVENUES> 13,634
<CGS> 9,610
<TOTAL-COSTS> 12,928
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 228
<INCOME-PRETAX> 491
<INCOME-TAX> 70
<INCOME-CONTINUING> 421
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 421
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
