Comtech Telecommunications Corp. has reported its operating results for the third fiscal quarter ended April 30, 2019 and updated its fiscal 2019 guidance.
Fiscal 2019 Third Quarter Highlights:
Net sales for the third quarter of fiscal 2019 were $170.4 million as compared to the $147.9 million achieved during the third quarter of fiscal 2018, representing an increase of $22.5 million, or 15.2%. Net sales for the first nine months of fiscal 2019 were $495.4 million as compared to the $403.2 million achieved during the first nine months of fiscal 2018, representing an increase of $92.2 million, or 22.9%.
Bookings during the third quarter of fiscal 2019 were $331.2 million, with a company-wide book-to-bill ratio (a measure defined as bookings divided by net sales) of 1.94 with both its Commercial and Government Solutions Segments achieving book-to-bill ratios in excess of 1.00. Bookings this quarter reflect strength in almost all of Comtech’s product lines, especially its safety and security technology solutions and HeightsTM satellite earth station technology solutions.
Backlog as of April 30, 2019 reflects a record high of $747.1 million. Backlog does not include the portions of multi-year contracts that have not been funded. When including the total value of multi-year contracts that Comtech has actually received, its revenue visibility is over $1.0 billion.
Adjusted EBITDA for the third quarter of fiscal 2019 was $24.0 million. Adjusted EBITDA for the first nine months of fiscal 2019 was $65.2 million as compared to the $47.7 million achieved during the first nine months of fiscal 2018, representing an increase of $17.5 million, or 36.7%. 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 took several strategic steps to enhance its business including: (i) closed on the acquisition of Solacom Technologies Inc. (“Solacom”) on February 28, 2019; (ii) closed on the acquisition of the state and local government next-generation 911 business from General Dynamics Information Technology, Inc. (the “GD NG-911 business”) on April 29, 2019; (iii) initiated efforts to acquire a small technology company with complimentary solution offering; and (iv) continued its ongoing evaluation and repositioning of its enterprise technology product solution line. In connection with these steps, Comtech incurred $1.7 million of acquisition plan expenses and $2.5 million of estimated contract settlement costs. It also recorded$0.6 million of discrete tax benefit. Including all of these expenses, GAAP operating income was $11.3 million, GAAP net income was $7.6 million and GAAP earnings per diluted share ("EPS") was $0.31.
As shown in the table below, Non-GAAP EPS for the third quarter of fiscal 2019 would have been $0.42 which was 23.5% higher than the Non-GAAP EPS of $0.34 for the third quarter of fiscal 2018. Non-GAAP EPS for the first nine months of fiscal 2019 was $1.05 or 208.8% higher than the Non-GAAP EPS of $0.34 for the first nine months of fiscal 2018.
Cash flows from operating activities during the third quarter of fiscal 2019 were $40.8 million. Cash flows from operating activities during the nine months ended April 30, 2019 were $53.8 million.
Find the full results of the release at Comtech's website! Additional information about Comtech’s third quarter financial results and Business Outlook for Fiscal 2019 is set forth in Comtech's Quarterly Report on Form 10-Q filed with the SECtoday and Comtech’s third quarter investor presentation which is located on its website at www.comtechtel.com.