Comtech Announces 2022 First Quarter Financial Results
Friday, December 10, 2021 | Comments

Comtech Telecommunications its financial results for the first fiscal quarter ended October 31 and reconfirmed its financial targets for fiscal year 2022.

Consolidated net sales for the first quarter were $116.8 million, generally accepted accounting principles (GAAP) net loss was $6 million and adjusted earnings before interest depreciation and amortization (EBITDA) was $5.5 million. Both net sales and adjusted EBITDA exceeded expectations. Comparatively, consolidated net sales for the first quarter of fiscal 2021 were $135.2 million, GAAP net loss was $85.8 million and adjusted EBITDA was $14.3 million.

New bookings for the first quarter of fiscal 2022 were $86.4 million, enabling the company to achieve a quarterly book-to-bill ratio of 0.74x. Based on expected new order flow, the company expects to achieve a book-to-bill ratio in excess of 1.00x for fiscal year 2022.

Backlog as of October 31 was $628.5 million, $23 million higher than the backlog that existed as of October 31. Additionally, the total value of multi-year contracts that Comtech has received is substantially higher than its reported backlog. When adding Comtech’s backlog and the total unfunded value of multi-year contracts that the company has received and from which it expects future orders, its revenue visibility is more than $1.2 billion. This amount excludes potential future orders for Comtech's next-generation satellite earth station technology which is under development.

During the quarter, Comtech secured a $100 million strategic growth investment from current stockholder White Hat Capital Partners and Magnetar Capital. This investment, which is in the form of Series A convertible preferred stock, significantly enhances Comtech’s financial flexibility and strengthens the company’s ability to capitalize on recent large contract awards and growing customer demand by making crucial investments in its satellite technologies and next-generation 9-1-1 (NG 9-1-1) public-safety solutions.

Comtech reported a GAAP operating loss of $6.5 million and a GAAP net loss per diluted common share of $0.43 for the first quarter of fiscal year 2022. The company generated GAAP operating cash flows of $4.8 million during the first quarter. As of October 31, cash and cash equivalents were $30.9 million, total debt outstanding was $108 million and secured leverage ratio was 1.57x and reflects a substantial reduction from 2.53x as of July 31, due to the company’s receipt of a $100 million strategic growth investment.

"Comtech’s better than expected first quarter performance during a challenging business environment reflects our strong market leadership positions, diversity of products and services and our track record of building and acquiring innovative technologies to create shareholder value,” said Comtech Chairman and outgoing CEO Fred Kornberg.

With COVID-19 continuing to impact global markets and supply chains, reliable forecasting remains challenging. Against that market backdrop, Comtech offers the following views on fiscal 2022. The company is aiming for net sales of $580 million to $600 million and adjusted EBITDA between $70 million and $76 million.

As mentioned in its full year fiscal 2021 results, on a consolidated basis, Comtech expects financial performance in the first half of fiscal year 2022 to be significantly lower than the comparative period of fiscal 2021, with the company’s second half of fiscal 2022 expected to be significantly higher than the comparative period of fiscal 2021. Quarterly results are expected to build sequentially throughout the year, with the fourth quarter being the peak quarter by far.

As global supply chain constraints have extended lead times for certain parts, the company is closely monitoring its inventory needs and supplier base and cautiously anticipates that supply chain constraints will ease during the second half of its fiscal 2022.

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