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Comtech
🇺🇸 NASDAQ:CMTL
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Jul 31, 2020

Comtech Q4 2020 Earnings Report

Comtech reported solid Q4 2020 results, showing a sequential increase in net sales and achieving a book-to-bill ratio of 1.07. The company's prudent financial management enabled them to generate strong operating cash flows.

Key Takeaways

Comtech Telecommunications Corp. reported solid fourth-quarter results for fiscal year 2020, with net sales of $149.7 million and a book-to-bill ratio of 1.07. The company reported operating income of $2.8 million, a net income of $1.1 million and EPS of $0.04. Comtech provided forward-looking comments and financial targets for fiscal 2021.

Consolidated net sales for the fourth quarter of fiscal 2020 were solid at $149.7 million, representing a sequential increase of 10.8% compared to the previous quarter.

Bookings of $159.7 million resulted in a book-to-bill ratio of 1.07 for the fourth quarter of fiscal 2020.

GAAP operating income was $2.8 million, net income was $1.1 million, and EPS was $0.04 for the fourth quarter of fiscal 2020.

Adjusted EBITDA for the fourth quarter of fiscal 2020 was $23.5 million, or 15.7% of consolidated net sales, with strong GAAP operating cash flows of $13.8 million.

Total Revenue
$150M
Previous year: $176M
-15.1%
EPS
$0.21
Previous year: $0.29
-27.6%
Book-to-Bill Ratio
1.07
Gross Profit
$49.7M
Previous year: $64M
-22.4%
Cash and Equivalents
$47.9M
Previous year: $45.6M
+5.1%
Free Cash Flow
$11M
Previous year: $11.8M
-7.1%
Total Assets
$930M
Previous year: $888M
+4.7%

Comtech

Comtech

Forward Guidance

Comtech expects fiscal 2021 consolidated net sales and Adjusted EBITDA will be slightly higher than the amounts achieved in fiscal 2020.

Positive Outlook

  • Strong demand for Manpack Satellite Terminals, networking equipment and other advanced VSAT products by the U.S. Army.
  • Ongoing sustainment services to the U.S. Army for the AN/TSC-198A SNAP terminal.
  • Sustainment services for the U.S. Army's Project Manager Mission Command (“PM MC”) Blue Force Tracking (“BFT-1”) program.
  • Joint Cyber Analysis Course (“JCAC”) training solutions.
  • Additional orders for the newly introduced Comtech COMET, the world’s smallest deployable troposcatter terminal, and its next-generation troposcatter system used by the U.S. Marine Corps.

Challenges Ahead

  • Fiscal 2021 net sales will reflect the absence of a high margin 911 call routing software contract from a large U.S. mobile network operator whose contract with Comtech ended in March 2020.
  • Fiscal 2021 will reflect the cessation of certain software-related services provided to a smaller U.S. mobile network operator that was recently acquired by a competitor.
  • Fiscal 2021 operating income will be impacted by acquisition plan expenses (including litigation expenses) associated with the pending acquisitions of Gilat Satellite Networks Ltd. ("Gilat") and UHP Networks, Inc. ("UHP").
  • To-date, during the first quarter of fiscal 2021, the Company has incurred approximately $14.2 million of acquisition related litigation expenses.
  • Acquisition plan expenses are expected to continue through the Company’s second quarter of fiscal 2021.

Company Overview

Full financial data and analysis

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