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 quarterly period ended April 30, 2004 |
( ) | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from _________________________ to __________________________ |
| Commission File Number: 0-7928 |
(Exact name of registrant as specified in its charter)
| Delaware |
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11-2139466 |
| (State or other jurisdiction of incorporation /organization) |
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(I.R.S. Employer Identification Number) |
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| 105 Baylis Road, Melville, New York |
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11747 |
| (Address of principal executive offices) |
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(Zip Code) |
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| (631) 777-8900 |
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| (Registrant’s telephone number, including area code) |
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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
Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
(X) Yes ( ) No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 3, 2004, the number of outstanding shares of Common Stock, par value $.10 per share, of the Registrant was 14,222,945 shares.
COMTECH TELECOMMUNICATIONS CORP.
INDEX
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Page |
| PART I. FINANCIAL INFORMATION |
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| Item 1. |
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Financial Statements |
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Consolidated Balance Sheets – April 30, 2004 (Unaudited) and July 31, 2003 |
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3 | |
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Consolidated Statements of Cash Flows - Nine Months Ended April 30, 2004 and 2003 (Unaudited) |
4 |
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5 - 10 | |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 - 18 | |
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18 | ||
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18 | ||
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| PART II. OTHER INFORMATION |
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19 | ||
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| 20 | |||
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21 - 24 | |||
1
PART I
FINANCIAL INFORMATION
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| Item 1. |
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April 30, |
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July 31, |
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| Assets |
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(Unaudited) |
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| Current assets: |
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| Cash and cash equivalents |
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$ |
152,818,000 |
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48,617,000 |
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| Restricted cash |
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4,196,000 |
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4,288,000 |
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| Accounts receivable, net |
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48,565,000 |
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26,696,000 |
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| Inventories, net |
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36,626,000 |
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34,048,000 |
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| Prepaid expenses and other current assets |
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2,155,000 |
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1,742,000 |
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| Deferred tax asset – current |
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5,699,000 |
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5,699,000 |
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| Total current assets |
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250,059,000 |
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121,090,000 |
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| Property, plant and equipment, net |
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13,351,000 |
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12,328,000 |
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| Goodwill and other intangibles with indefinite lives |
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17,726,000 |
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17,726,000 |
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| Intangibles with definite lives, net |
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9,855,000 |
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11,353,000 |
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| Deferred financing costs, net |
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3,677,000 |
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— |
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| Other assets |
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370,000 |
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390,000 |
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| Deferred tax asset – non-current |
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1,363,000 |
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1,363,000 |
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$ |
296,401,000 |
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164,250,000 |
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| Total assets |
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| Liabilities and Stockholders’ Equity |
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| Current liabilities: |
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| Current installments of capital lease obligations |
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$ |
343,000 |
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899,000 |
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| Accounts payable |
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11,154,000 |
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11,527,000 |
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| Accrued expenses and other current liabilities |
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17,301,000 |
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13,267,000 |
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| Customer advances and deposits |
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5,855,000 |
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2,491,000 |
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| Deferred service revenue |
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13,439,000 |
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11,160,000 |
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| Interest payable |
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554,000 |
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— |
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| Income taxes payable |
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6,414,000 |
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6,945,000 |
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| Total current liabilities |
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55,060,000 |
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46,289,000 |
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| Convertible senior notes |
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105,000,000 |
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— |
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| Capital lease obligations, less current installments |
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194,000 |
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393,000 |
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| Total liabilities |
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160,254,000 |
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46,682,000 |
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| Stockholders’ equity: |
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| Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000 |
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— |
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| Common stock, par value $.10 per share; authorized 30,000,000 shares; issued 14,363,570 shares at April 30, 2004 and 14,020,769 shares at July 31, 2003 |
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1,436,000 |
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1,402,000 |
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| Additional paid-in capital |
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110,321,000 |
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107,573,000 |
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| Retained earnings |
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24,623,000 |
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8,884,000 |
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136,380,000 |
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117,859,000 |
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| Less: |
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| Treasury stock (140,625 shares) |
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(185,000 |
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(185,000 |
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| Deferred compensation |
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(48,000 |
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(106,000 |
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| Total stockholders’ equity |
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136,147,000 |
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117,568,000 |
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| Total liabilities and stockholders’ equity |
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$ |
296,401,000 |
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164,250,000 |
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| Commitments and contingencies |
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See accompanying notes to consolidated financial statements.
2
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three
months ended |
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Nine
months ended |
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2004 |
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2003 |
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2004 |
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2003 |
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Net sales |
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$ |
51,244,000 |
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48,753,000 |
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164,334,000 |
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122,352,000 |
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Cost of sales |
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30,635,000 |
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32,262,000 |
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102,132,000 |
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80,641,000 |
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Gross profit |
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20,609,000 |
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16,491,000 |
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62,202,000 |
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41,711,000 |
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Expenses: |
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Selling, general and administrative |
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8,775,000 |
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7,270,000 |
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26,153,000 |
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19,970,000 |
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Research and development |
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3,993,000 |
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3,014,000 |
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11,198,000 |
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9,326,000 |
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Amortization of intangibles |
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499,000 |
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488,000 |
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1,498,000 |
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1,540,000 |
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13,267,000 |
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10,772,000 |
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38,849,000 |
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30,836,000 |
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Operating income |
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7,342,000 |
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5,719,000 |
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23,353,000 |
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10,875,000 |
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Other expense (income): |
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Interest expense |
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675,000 |
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682,000 |
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750,000 |
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2,059,000 |
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Interest income |
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(324,000 |
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(66,000 |
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(543,000 |
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(187,000 |
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Income before provision for income taxes |
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6,991,000 |
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5,103,000 |
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23,146,000 |
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9,003,000 |
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Provision for income taxes |
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2,238,000 |
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1,633,000 |
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7,407,000 |
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2,881,000 |
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Net income |
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$ |
4,753,000 |
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3,470,000 |
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15,739,000 |
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6,122,000 |
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Net income per share: |
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Basic |
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$ |
0.33 |
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0.31 |
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1.12 |
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0.54 |
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Diluted |
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$ |
0.31 |
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0.29 |
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1.02 |
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0.52 |
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Weighted average number of common shares outstanding – basic |
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14,217,000 |
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11,351,000 |
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14,083,000 |
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11,307,000 |
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Potential dilutive common shares |
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1,187,000 |
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711,000 |
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1,354,000 |
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563,000 |
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Weighted average number of common and common equivalent shares outstanding assuming dilution – diluted |
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15,404,000 |
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12,062,000 |
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15,437,000 |
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11,870,000 |
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See accompanying notes to consolidated financial statements.
3
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine months ended |
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2004 |
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2003 |
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| Cash flows from operating activities: |
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| Net income |
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$ |
15,739,000 |
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6,122,000 |
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| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation of property, plant and equipment and amortization of intangibles |
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4,738,000 |
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4,617,000 |
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| Amortization of deferred financing costs |
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144,000 |
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— |
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| Pr | ||||||