Comtech Telecom (CMTL) Misses Q3 EPS by 15c, Revenues Miss

Comtech Telecom (NASDAQ: CMTL) reported Q3 EPS of ($0.16), $0.15 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $135.1 million versus the consensus estimate of $148.83 million.

Fiscal 2020 Third Quarter Highlights

• Net sales for the third quarter of fiscal 2020 were $135.1 million.
• Bookings during the third quarter of fiscal 2020 were $137.5 million, with a company-wide book-to-bill ratio of 1.02. Backlog as of April 30, 2020 was $640.7 million. When adding Comtech's backlog and the total unfunded value of certain multi-year contracts that Comtech has received and for which it expects future orders, its revenue visibility approximates $1.0 billion.
• On a GAAP basis, the Company reported an operating loss of $3.1 million, a net loss of $4.0 million and a net loss per diluted share ("EPS") of $0.16. Comtech's operating loss was impacted by $6.0 million of acquisition plan expenses and $0.5 million of estimated contract settlement costs. As shown in the table below, excluding acquisition plan expenses, estimated contract settlement costs and a net discrete tax expense of $0.7 million during the quarter, Non-GAAP net income and EPS were $1.2 million and $0.05, respectively. Non-GAAP EPS is a non-GAAP financial measure which is reconciled to the most directly comparable GAAP financial measure below.
• Adjusted EBITDA for the third quarter of fiscal 2020 was $12.5 million, or 9.2% of consolidated net sales. Adjusted EBITDA is a non-GAAP financial measure which is reconciled to the most directly comparable GAAP financial measure and is more fully defined below.
• Comtech generated GAAP operating cash flows of $7.7 million during the quarter and had $50.6 million of cash and cash equivalents at April 30, 2020.

In commenting on Comtech’s performance for the third quarter of fiscal 2020, Fred Kornberg, Chairman of the Board and Chief Executive Officer, noted, "No doubt, the third quarter was challenging for Comtech. But I have never been prouder of our employees for their dedication and commitment to our customers. I am exceedingly grateful for the trust our customers continue to place in Comtech’s industry leading technology and expertise. Looking forward, I remain enthusiastic about our efforts on a number of large strategic orders and we are laser focused on positioning the company for a strong fiscal 2021."

For earnings history and earnings-related data on Comtech Telecom (CMTL) click here.

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