Comtech Telecommunications Corp. Announces Record Results for the Second Quarter of Fiscal 2005 and Declares 3-for-2 Stock Split

Business Wire, March 9, 2005

MELVILLE, N.Y. -- Comtech Telecommunications Corp. (Nasdaq: CMTL) today reported record results for the second quarter of fiscal 2005. Sales, operating profit, EBITDA, net income and diluted earnings per share shattered all previous highs. The Company also announced that its Board of Directors has approved a three-for-two stock split to be effected in the form of a stock dividend. The financial information in this press release has not been adjusted for the stock split. Such information will be restated to reflect the stock split once it becomes effective.

Quarterly sales soared past the $70 million mark for the first time in the Company's history. Net sales for the three months ended January 31, 2005 were $78.1 million compared to $56.8 million for the three months ended January 31, 2004. Strong increases in sales were experienced in all three business segments.

Net income of $10.2 million, or $0.59 per diluted share, for the three months ended January 31, 2005 was nearly double the $5.2 million, or $0.34 per diluted share, for the three months ended January 31, 2004. The diluted earnings per share amount for the second quarter of fiscal 2005 reflects $0.05 of dilution in connection with the required adoption of new accounting rules regarding the impact of contingently convertible debt on the calculation of diluted earnings per share.

The second quarter results were impacted by favorable adjustments to certain long-term contracts in our telecommunications transmission and mobile data communications segments which reflect continuing positive trends in our performance on these contracts, as well as increased funding on the Movement Tracking System contract with the U.S. Army. These adjustments, which are more fully described in our Form 10-Q filed earlier today, contributed $5.9 million, $3.7 million, $3.3 million and $2.2 million, respectively, to the quarter's net sales, gross profit, operating profit and net income.

Net sales for the six months ended January 31, 2005 were $134.2 million compared to $113.1 million for the six months ended January 31, 2004. Net income for the six months ended January 31, 2005 was $17.3 million, or $1.02 per diluted share, versus $11.0 million, or $0.71 per diluted share, for the six months ended January 31, 2004.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $16.6 million and $9.2 million for the three months ended January 31, 2005 and 2004, respectively. For the six months ended January 31, 2005 and 2004, EBITDA was $28.8 million and $19.1 million, respectively. Cash flows from operating activities were an impressive $40.5 million for the six months ended January 31, 2005.

Backlog as of January 31, 2005 remained strong at $159.0 million. Bookings for the three and six months ended January 31, 2005 were $74.4 million and $209.6 million, respectively.

The additional shares relating to the stock split will be issued on April 4, 2005 to stockholders of record on March 21, 2005. Cash will be distributed in lieu of any fractional shares. The Company currently has 14,436,919 shares outstanding. After the split, there will be approximately 21,655,000 shares outstanding.

In commenting on the Company's performance during the second quarter of fiscal 2005, Fred Kornberg, President and Chief Executive Officer, noted, "The quarter was truly outstanding in every sense of the word, as evidenced by our operating results which were impressive based on any measure. We view our performance in recent years as a tangible validation of our strategic vision."

Mr. Kornberg added, "Fiscal 2005 is expected to be another record year for us on the top and bottom lines: the third in a row. In fact, our sales for the first six months of fiscal 2005 exceeded our sales for all of fiscal 2002. The vast majority of the sales growth was organic; further validating that we enjoy solid leadership positions in high growth markets. We look forward to the balance of fiscal 2005 and beyond with continued enthusiasm."

In commenting on the Company's stock split, Mr. Kornberg noted, "We believe the stock split will enhance the liquidity in the market for our shares and make our shares more accessible to individual and institutional investors."

Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The Company conducts its business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers. The Company offers niche products, systems and services where it believes it has technological, engineering, systems design or other expertise that differentiate its product offerings.

The Company has scheduled an investor conference call for 11:30 AM (ET) on Wednesday, March 9, 2005. Investors and the public are invited to access a live webcast of the conference call from the news section of the Comtech web site, www.comtechtel.com. Alternatively, investors can access the conference call by dialing (877) 707-9631 (domestic), or (785) 832-0326 (international) and using the conference I.D. of "Comtech." A replay of the conference call will be available for seven days by dialing (402) 220-1550. In addition, an updated investor presentation, including updated earnings guidance, will be available on our web site shortly after the conference call.