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, 1999
( ) 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 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)
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 - 2,776,804 shares outstanding as of
February 24, 1999.
<PAGE>
COMTECH TELECOMMUNICATIONS CORP.
INDEX
Page
No.
PART I FINANCIAL INFORMATION
Consolidated Balance Sheets - 3
January 31, 1999 (unaudited) and
July 31, 1998
Consolidated Statements of Income - 4
Three Months and Six Months Ended
January 31, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows - 5
Six Months Ended January 31, 1999 and 1998
(unaudited)
Notes to Consolidated Financial Statements 6-7
Management's Discussion and Analysis of 8-11
Financial Condition and Results of Operations
PART II OTHER INFORMATION 12
Signature Page 13
<PAGE>
PART I
FINANCIAL INFORMATION
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
January 31, 1999 July 31, 1998
---------------- -------------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 3,080,000 $ 2,724,000
Restricted cash 22,000 22,000
Accounts receivable, less allowance for doubtful
accounts of $281,000 at January 31, 1999
and $170,000 at July 31, 1998 7,700,000 5,932,000
Inventories, net 6,676,000 6,135,000
Prepaid expenses and other current assets 232,000 276,000
Deferred tax asset - current 510,000 ---
------- ------------
Total current assets 18,220,000 15,089,000
-------------- ------------
Property, plant and equipment, net 4,362,000 4,314,000
Intangible assets 1,687,000 ---
Other assets 330,000 307,000
Deferred tax asset - non current 910,000 ---
-------------- ------------
Total assets $ 25,509,000 $ 19,710,000
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current installments of long-term debt (including
payable to related party of $301,000 at January 31,
1999 and $309,000 at July 31, 1998) $ 714,000 $ 804,000
Notes payable 250,000 ---
Accounts payable 4,491,000 2,588,000
Accrued expenses and other current liabilities 4,120,000 2,780,000
-------------- ------------
Total current liabilities 9,575,000 6,172,000
-------------- ------------
Long-term debt, less current installments
(including payable to related party of $663,000
at January 31, 1999 and $817,000 at July 31, 1998) 1,117,000 1,445,000
-------------- ------------
Total liabilities 10,692,000 7,617,000
-------------- ------------
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 2,776,804
shares at January 31, 1999 and 2,672,004 at July 31, 1998 278,000 267,000
Additional paid-in capital 22,719,000 22,189,000
Accumulated deficit (7,843,000) (10,011,000)
--------------- -------------
Less:
Treasury stock (55,000 shares at January 31, 1999 and
July 31, 1998) (184,000) (184,000)
Deferred compensation expense (153,000) (168,000)
--------------- ------------
14,817,000 12,093,000
-------------- ------------
</TABLE>
Total liabilities and stockholders' equity $ 25,509,000 $ 19,710,000 See
accompanying notes to consolidated financial statements.
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended Six Months Ended
January 31 January 31,
(unaudited) (unaudited)
1999 1998 1999 1998
Net sales $ 9,057,000 $ 7,700,000 $ 17,792,000 $ 13,634,000
------------ ----------- ------------ -------------
Operating costs and expenses:
Cost of sales 6,386,000 5,570,000 12,405,000 9,610,000
Selling, general and administrative 1,626,000 1,299,000 3,346,000 2,728,000
Research and development 624,000 323,000 1,150,000 590,000
----------- ----------- ------------ -------------
Total operating costs and expenses 8,636,000 7,192,000 16,901,000 12,928,000
----------- ----------- ------------ -------------
Operating income 421,000 508,000 891,000 706,000
Other (expenses) income:
Interest expense (55,000) (150,000) (107,000) (228,000)
Interest income 15,000 3,000 34,000 9,000
Other income --- 1,000 2,000 4,000
----------- ----------- ------------ -------------
Income from operations
before provision(benefit)
for income taxes 381,000 362,000 820,000 491,000
Provision (benefit) for income taxes (1,393,000) 45,000 (1,348,000) 70,000
----------- ----------- ----------- -------------
Net income $ 1,774,000 $ 317,000 $ 2,168,000 $ 421,000
=========== =========== ============ =============
Net income per share:
Basic $ 0.65 $ 0.12 $ 0.81 $ 0.16
Diluted $ 0.59 $ 0.12 $ 0.74 $ 0.16
=============== ============== ================= ================
Weighted average number of common
and common equivalent shares
outstanding - Basic computation 2,721,221 2,644,433 2,669,117 2,644,433
Potential dilutive common shares 263,676 --- 245,169 ---
----------- ----------- ------------ -------------
Weighted average number of common and
common equivalent shares outstanding
assuming dilution - Diluted computation 2,984,897 2,644,433 2,914,286 2,644,433
=========== =========== ============ ==============
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
January 31,
(unaudited)
1999 1998
Cash flows from operating activities:
Net income $ 2,168,000 $ 421,000
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization 694,000 594,000
Deferred income taxes (1,420,000) ---
Provision for bad debt 111,000 ---
Amortization of deferred compensation expense net 15,000 12,000
Changes in assets and liabilities:
Accounts receivable (1,678,000) (436,000)
Inventories (126,000) (925,000)
Prepaid expenses and other current assets 44,000 (90,000)
Other assets (42,000) (2,000)
Accounts payable 1,100,000 (31,000)
Accrued expenses and other current liabilities 561,000 775,000
----------- ------------
Net cash provided by operating activities 1,427,000 318,000
----------- ------------
Cash flows from investing activities:
Purchases of property, plant and equipment (492,000) (175,000)
Payment for business acquisition less
net cash received (173,000) ---
------------ ------------
Net cash (used in) investing activities (665,000) (175,000)
------------ -------------
Cash flows from financing activities:
Notes payable --- 378,000
Principal payments on long-term debt (418,000) (304,000)
Proceeds from exercise of stock options 12,000 5,000
----------- ------------
Net cash (used in) provided by financing activities (406,000) 79,000
------------ ------------
Net increase in cash and cash equivalents 356,000 222,000
Cash and cash equivalents at beginning of period 2,724,000 1,364,000
--------- ------------
Cash and cash equivalents at end of period $ 3,080,000 $ 1,586,000
=========== ============
Supplemental cash flow disclosure:
Cash paid during the period for:
Interest $ 107,000 $ 158,000
Income taxes $ 143,000 $ 50,000
</TABLE>
Non Cash Items:
Non cash items include the issuance of a note payable of $250,000 and the
issuance of common stock valued at $528,000 in connection with the acquisitions
of new businesses. In fiscal 1998, the Company entered into new capital lease
agreements in the amounts of $505,000.
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 month
and three month periods ended January 31, 1999 and 1998 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, 1999 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>
<S> <C> <C> <C> <C> <C> <C>
January 31, 1999 July 31, 1998
Accounts receivable from commercial customers $ 4,383,000 $ 4,302,000
Unbilled receivables (including retainages) on
contracts-in-progress 2,955,000 1,531,000
Amounts receivable from the United States government
and its agencies 643,000 269,000
------------- -------------
7,981,000 6,102,000
Less allowance for doubtful accounts 281,000 170,000
------------- -------------
Accounts receivable, net $ 7,700,000 $ 5,932,000
============= =============
(3) Inventories
Inventories consist of the following:
January 31, 1999 July 31, 1998
Raw materials and components $ 3,610,000 $ 3,365,000
Work-in-process 3,981,000 4,103,000
------------- -------------
7,591,000 7,468,000
Less:
Progress payments 915,000 1,333,000
------------- -------------
Inventories - net $ 6,676,000 $ 6,135,000
============= =============
(4) Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
January 31, 1999 July 31, 1998
Customer advances and deposits $ 1,661,000 $ 652,000
Accrued wages and benefits 1,432,000 1,068,000
Accrued commissions 361,000 452,000
Other 666,000 608,000
------------- -------------
$ 4,120,000 $ 2,780,000
============= =============
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
(5) Long-Term Debt
Long-term debt consists of the following:
January 31, 1999 July 31, 1998
Obligations under capital leases $ 1,831,000 $ 2,249,000
Less current installments 714,000 804,000
------------- -------------
$ 1,117,000 $ 1,445,000
============= =============
</TABLE>
(6) Acquisitions
In the first quarter of fiscal 1999, the Company acquired the assets and
assumed certain liabilities of two businesses. The acquisitions are being
accounted for using the purchase method of accounting with the operations of
these businesses being consolidated with those of the Company from their
respective dates of acquisition. The excess of the purchase price over the fair
value of the net assets acquired and liabilities assumed approximates
$1,701,000, which has been included in intangible assets in the accompanying
consolidated balance sheet and is being amortized over a 20 year period.
(7) Income Taxes
The provision for income tax consists primarily of state and local taxes
offset in the quarter ending January 31, 1999 by $1,420,000 representing a
reduction in the valuation allowance for deferred tax assets. Due to the
continued profitability of the Company and the award of certain contracts, the
Company believes it is more likely than not that a portion of its deferred tax
assets will be realized.
<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, 1998, 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.
Recent Developments
During the first quarter of fiscal 1999, the Company formed two new wholly owned
subsidiaries. Comtech Wireless, Inc. ("CWI") which is located in Woodbridge, New
Jersey will design and manufacture Wireless Local Loop Systems for the rural and
remote telephony market. Comtech Mobile Datacom Corp. ("CMDC") which is located
in Germantown, Maryland will provide satellite based packet data communication
services between remote mobile and fixed assets and home base using an open
architecture asset tracking system. CMDC will focus on transportation and energy
markets, both commercial and government and will serve customers in the U.S. and
elsewhere as satellite resources which offer global reach are deployed over the
next few years.
In October 1998, the Company's operating unit, CSI, was awarded a contract for
approximately $42.5 million by a major U.S. Prime Contractor. The contract is
for design, engineering and production of sheltered communication terminals
consisting of Comtech digital over-the-horizon and line-of-sight microwave
radios and integrated UHF/VHF and HF radios for use in a foreign country. The
terminals, configured for mobile deployment, are scheduled for delivery over the
next 30 months.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31,
1999 AND JANUARY 31, 1998
Net Sales. Net sales were $9,057,000 and $7,700,000 for the three months ended
January 31, 1999 and 1998, respectively, representing an increase of $1,357,000,
or 17.6%. This was primarily due to an increase in sales at CSI, CASI and CCC,
partially offset by a decrease in sales at CPST. Sales at CSI are expected to
continue to increase as the result of an order received in October 1998 for
$42,500,000 for delivery over approximately the next three years. The increase
in sales at CCC was partially the result of orders received for recently
developed new products.
Gross Margin. Gross profit was $2,671,000 or 29.5% of net sales for the three
months ended January 31, 1999 compared to $2,130,000 or 27.7% of net sales for
the same period in fiscal 1998. Higher gross profits in the fiscal 1999 period
were due primarily to the higher sales volume. Higher gross profit margins, as a
percent of net sales, were primarily due to the mix of products sold in each
period.
Selling, General and Administrative. Selling, general and administrative
expenses were $1,626,000 and $1,299,000 for the three months ended January 31,
1999 and 1998, respectively, representing an increase of $327,000, or 25.2%.
This increase was partially due to the higher level of expense required to
support the increased sales volume and partially due to the addition of two new
subsidiaries in fiscal 1999.
Research and Development. Research and development expenses were $624,000 and
$323,000 for the three months ended January 31, 1999 and 1998, respectively,
representing an increase of $301,000, or 93.2% increase. This increase was
primarily due to expenses for continuing product development and general product
improvement Results from Operations. As a result of the foregoing factors, the
Company had operating earnings of $421,000 for the three months ended January
31, 1999 compared to $508,000 for the comparable prior year period.
Interest Expense. Interest expense was $55,000 and $150,000 for the three months
ended January 31, 1999 and 1998, respectively, representing a decrease of
$95,000. Interest expense for both periods was substantially due to interest
associated with the Company's capital lease obligations.
Interest Income. Interest income was $15,000 and $3,000 for the three months
ended January 31, 1999 and 1998, respectively. This increase was due primarily
to the increase in the amount of cash available to invest in the fiscal 1999
period.
Other Income. Other income was $1,000 for the three months ended January 31,
1998. This income was from the sale of scrap materials.
Provision/Benefit for Income Taxes. The provision for income taxes was $27,000
and $45,000 for the three months ended January 31, 1999 and 1998, respectively,
which principally relates to state income taxes. The Company has NOL
carry-forwards to offset Corporate federal income tax and is, until those
carryforwards are fully utilized, generally only subject to the alternative
minimum tax. The Company has previously provided a full valuation allowance for
any deferred tax asset that would result from this NOL and other items that give
rise to the temporary differences between the tax liability for financial
statements and the actual tax return. Primarily due to the Company's continued
profitability, the Company determined it was more likely than not that a portion
of the valuation allowance would not be required and, consequently, recorded a
deferred tax asset and income tax benefit of $1,420,000 in the quarter ended
January 31, 1999.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31,
1999 AND JANUARY 31, 1998
Net Sales. Net sales were $17,792,000 and $13,634,000 for the six months ended
January 31, 1999 and 1998, respectively, representing an increase of $4,158,000
or 30.5%. The increase in sales was due primarily to a higher volume of sales at
CSI, CASI and CCC, partially offset by results at CPST. Sales at CSI are
expected to continue to increase as the result of an order received in October
1998 for $42,500,000 for delivery over approximately the next three years. The
increase in sales at CCC was partially the result of orders received for
recently developed new products.
Gross Margin. Gross profit was $5,387,000 or 30.3% of net sales for the six
months ended January 31, 1999 compared to $4,024,000 or 29.5% of net sales for
the same period in fiscal 1998. Higher gross profits in the fiscal 1999 period
were due primarily to the higher sales volume. Higher gross profit margins, as a
percentage of net sales, were primarily due to the mix of products sold in each
period.
Selling, General and Administrative. Selling, general and administrative
expenses were $3,346,000 or 18.8% of net sales for the six months ended January
31, 1999 compared to $2,728,000 or 20.0% of net sales for the same period in
fiscal 1998. The $618,000 increase in total cost was primarily due to the
additional expenses required to support the increased sales volume and partially
due to the addition of two new subsidiaries.
Research and Development. Research and development expenses were $1,150,000 and
$590,000 for the six months ended January 31, 1999 and 1998, respectively,
representing an increase of $560,000 or 94.9%. This increase was due primarily
to expenses for continuing product development and general product improvements.
Results From Operations. As a result of the foregoing factors, the Company had
operating earnings of $891,000 and $706,000 for the six months ended January 31,
1999 and 1998, respectively.
Interest Expense. Interest expense was $107,000 and $228,000 for the six months
ended January 31, 1999 and 1998, respectively. Interest expense for both periods
was attributable largely to interest associated with the Company's capital lease
obligations.
Interest Income. Interest income was $34,000 and $9,000 for the six months ended
January 31, 1999 and 1998, respectively. This increase was due primarily to the
increase in the amount of cash available to invest in the fiscal 1999 period.
Other Income. Other income was $2,000 and $4,000 for the six months ended
January 1999 and 1998, respectively. This income was from the sale of scrap
materials and the proceeds from the sale of fully depreciated equipment.
Provision/Benefit for Income Taxes. The provision for income taxes was $72,000
and $70,000 for the six months ended January 31, 1999 and 1998, respectively,
which principally relates to state income taxes. The Company has NOL
carry-forwards to offset Corporate federal income tax and is, until those
carryforwards are fully utilized, generally only subject to the alternative
minimum tax. The Company has previously provided a full valuation allowance for
any deferred tax asset that would result from this NOL and other items that give
rise to the temporary differences between the tax liability for financial
statements and the actual tax return. Primarily due to the Company's continued
profitability, the Company determined it was more likely than not that a portion
of the valuation allowance would not be required and, consequently, recorded a
deferred tax asset and income tax benefit of $1,420,000 in the quarter ended
January 31, 1999.
LIQUITY AND CAPITAL RESOURCES
For the six month period ended January 31, 1999, the Company's cash and cash
equivalent position increased by $356,000 from $2,724,000 at July 31, 1998 to
$3,080,000 at January 31, 1999. Operating activities provided $1,427,000 of
cash, investing activities used $665,000 of cash and financing activities used
$406,000 of cash. During the period, the Company formed two new wholly owned
subsidiaries which acquired the assets and assumed certain liabilities of two
other companies. The total consideration for these acquisitions was
approximately $978,000 which was financed by a cash payment of $200,000, a
promissory note of $250,000 and the balance through the issuance of restricted
stock and warrants. The balances at January 31, 1999 include the assets and
liabilities of these acquisitions.
Net accounts receivable increased from July 31, 1998 by $1,768,000 due primarily
to the timing of the shipments and the subsequent collection of the related
receivable. The allowance for doubtful accounts increased by $111,000. The
Company reviews its allowance for doubtful accounts periodically and believes it
is sufficient based on past experience and the Company's credit standards.
Net inventory increased by $541,000, primarily due to the higher backlog of
orders. 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.
Intangible assets at January 31, 1999 of $1,731,000 consist of "good will" as a
result of the acquisitions referred to above, which is being amortized over 20
years.
Accounts payable increased by $1,903,000 primarily due to the increase of
inventory purchases. The increase of $1,340,000 in accrued expenses and other
current liabilities was primarily due to increases in customer advances and
deposits and accrued wages and benefits. The Company made leasehold improvements
and purchases of equipment of $492,000. Long term debt (including current
installments) decreased by $418,000 due to payments made. All of the Company's
long term debt consists of capital leases for its facilities and equipment.
In December 1998 the Company renewed its credit facility with Republic National
Bank of New York. The total facility available to the Company has increased to
$8,000,000. The interest rate on borrowings is Libor plus 1-1/2%. There have
been no borrowings against the facility.
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.
Year 2000 Compliance
Management has initiated a company-wide program and has developed a formal plan
of implementation to prepare the Company for the Year 2000. This includes taking
actions designed to ensure that the Company's information technology ("IT")
systems, products and infrastructure are Year 2000 compliant and that its
customers, suppliers and service providers have taken similar action. At this
time, management believes that the Company does not have any significant
internal problem other than to upgrade some of its software to available new
releases which are Year 2000 compliant. With respect to its external issues -
customers, suppliers and service providers - the Company is surveying them
primarily through written correspondence. Despite the efforts to survey
customers, suppliers and service providers, management cannot be certain as to
the actual Year 2000 readiness of these third parties. To the extent any of its
suppliers or service providers are not Year 2000 ready, the Company believes
that it will be able to obtain other suppliers or service providers without a
significant interruption to its business. However, there can be no assurance
that such interruption will not have a material adverse effect on the Company.
To date, the Company has not formulated a Year 2000 contingency plan. The
Company is reviewing responses to its inquiries and will determine the need for
a contingency plan upon completion of this review. The Company anticipates
completing its Year 2000 project in mid calendar 1999.
Management currently believes that the costs related to the Corporation's
compliance with the Year 2000 issue should not have a material adverse effect on
its consolidated financial position, results of operations or cash flows.
<PAGE>
PART II
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(c) In connection with the acquisition by the Company of the
assets of Mobile Datacom Corporation ("MDC") on September 24,
1998, the Company issued an aggregate 100,000 shares of
Company Common Stock on November 13, 1998, warrants to
purchase an aggregate 100,000 shares of Company Common Stock
and an aggregate $100,000. The securities were issued in
reliance upon the exemption provided in Section 4(2) of the
Securities Act of 1993, as amended. The warrants are
exercisable for five years from the date of issuance at an
exercise price of $9.86 per share.
Item 4. Results of Votes of Security Holders
(1) At the Company's Annual Stockholders' Meeting held on December
15, 1998, Mr. Fred Kornberg and Mr. Sol S. Weiner were
reelected as Directors for a three year term. The votes were
as follows: Mr. Kornberg - votes for 2,305,552; votes withheld
19,692. Mr. Weiner - votes for 2,304,992; votes withheld
20,252. .Dr. George Bugliarello and Mr. Richard L. Goldberg
continued on as Directors for a term expiring in two years and
Mr. Gerard R. Nocita and Dr. John B. Payne for a term expiring
in one year
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are being filed as part of this Report:
Exhibit No. Description
27 Financial Data Schedule as of January 31, 1999.
(b) In December, 1998 the Company filed a report on Form 8-K with
respect to the declaration of a dividend by the Company's
Board of Directors of one preferred stock purchase right for
each outstanding share of Company Common Stock payable to
stockholders of record on January 4, 1999. The purchase rights
are governed by the terms of a Rights Agreement between the
Company and American Srock Transfer and Trust Company which is
described in the Form 8-K.
<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 ______ 1999 By: /s/ Fred Kornberg
------------------------------
Fred Kornberg
Chairman of the Board
Chief Executive Officer
and President
Date: March ______, 1999 By: /s/ Gail Segui
-------------------------------
Gail Segui
Secretary and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Consolidated Financial Statements Form 10-Q 01/31/99 and is qualified in its
entirety by referance to such financial statements.
</LEGEND>
<CIK> 0000023197
<NAME> COMTECH TELECOMMUNICATIONS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 3,102
<SECURITIES> 0
<RECEIVABLES> 7,981
<ALLOWANCES> 281
<INVENTORY> 6,676
<CURRENT-ASSETS> 18,220
<PP&E> 17,649
<DEPRECIATION> 13,287
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0
0
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</TABLE>
