FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (As last amended in Rel. No. 34-26589, eff. 4/12/89) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20459 Form 10-Q (Mark One) (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended January 31, 1999 ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 0-7928 COMTECH TELECOMMUNICATIONS CORP. (Exact name of registrant as specified in its charter) Delaware 11-2139466 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 105 Baylis Road, Melville, New York 11747 (Address of principal executive offices) (Zip Code) (516) 777-8900 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (X) Yes ( ) No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ( ) Yes ( ) No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, Par Value $.10 Per Share - 2,776,804 shares outstanding as of February 24, 1999.
COMTECH TELECOMMUNICATIONS CORP. INDEX Page No. PART I FINANCIAL INFORMATION Consolidated Balance Sheets - 3 January 31, 1999 (unaudited) and July 31, 1998 Consolidated Statements of Income - 4 Three Months and Six Months Ended January 31, 1999 and 1998 (unaudited) Consolidated Statements of Cash Flows - 5 Six Months Ended January 31, 1999 and 1998 (unaudited) Notes to Consolidated Financial Statements 6-7 Management's Discussion and Analysis of 8-11 Financial Condition and Results of Operations PART II OTHER INFORMATION 12 Signature Page 13
PART I FINANCIAL INFORMATION COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS <TABLE> <S> <C> <C> <C> <C> <C> <C> January 31, 1999 July 31, 1998 ---------------- ------------- (unaudited) ASSETS: Current assets: Cash and cash equivalents $ 3,080,000 $ 2,724,000 Restricted cash 22,000 22,000 Accounts receivable, less allowance for doubtful accounts of $281,000 at January 31, 1999 and $170,000 at July 31, 1998 7,700,000 5,932,000 Inventories, net 6,676,000 6,135,000 Prepaid expenses and other current assets 232,000 276,000 Deferred tax asset - current 510,000 --- ------- ------------ Total current assets 18,220,000 15,089,000 -------------- ------------ Property, plant and equipment, net 4,362,000 4,314,000 Intangible assets 1,687,000 --- Other assets 330,000 307,000 Deferred tax asset - non current 910,000 --- -------------- ------------ Total assets $ 25,509,000 $ 19,710,000 ============== ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Current installments of long-term debt (including payable to related party of $301,000 at January 31, 1999 and $309,000 at July 31, 1998) $ 714,000 $ 804,000 Notes payable 250,000 --- Accounts payable 4,491,000 2,588,000 Accrued expenses and other current liabilities 4,120,000 2,780,000 -------------- ------------ Total current liabilities 9,575,000 6,172,000 -------------- ------------ Long-term debt, less current installments (including payable to related party of $663,000 at January 31, 1999 and $817,000 at July 31, 1998) 1,117,000 1,445,000 -------------- ------------ Total liabilities 10,692,000 7,617,000 -------------- ------------ Stockholders' equity: Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000 --- Common stock, par value $.10 per share; authorized 15,000,000 shares; issued 2,776,804 shares at January 31, 1999 and 2,672,004 at July 31, 1998 278,000 267,000 Additional paid-in capital 22,719,000 22,189,000 Accumulated deficit (7,843,000) (10,011,000) --------------- ------------- Less: Treasury stock (55,000 shares at January 31, 1999 and July 31, 1998) (184,000) (184,000) Deferred compensation expense (153,000) (168,000) --------------- ------------ 14,817,000 12,093,000 -------------- ------------ </TABLE> Total liabilities and stockholders' equity $ 25,509,000 $ 19,710,000 See accompanying notes to consolidated financial statements.
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME <TABLE> <S> <C> <C> <C> <C> <C> <C> Three Months Ended Six Months Ended January 31 January 31, (unaudited) (unaudited) 1999 1998 1999 1998 Net sales $ 9,057,000 $ 7,700,000 $ 17,792,000 $ 13,634,000 ------------ ----------- ------------ ------------- Operating costs and expenses: Cost of sales 6,386,000 5,570,000 12,405,000 9,610,000 Selling, general and administrative 1,626,000 1,299,000 3,346,000 2,728,000 Research and development 624,000 323,000 1,150,000 590,000 ----------- ----------- ------------ ------------- Total operating costs and expenses 8,636,000 7,192,000 16,901,000 12,928,000 ----------- ----------- ------------ ------------- Operating income 421,000 508,000 891,000 706,000 Other (expenses) income: Interest expense (55,000) (150,000) (107,000) (228,000) Interest income 15,000 3,000 34,000 9,000 Other income --- 1,000 2,000 4,000 ----------- ----------- ------------ ------------- Income from operations before provision(benefit) for income taxes 381,000 362,000 820,000 491,000 Provision (benefit) for income taxes (1,393,000) 45,000 (1,348,000) 70,000 ----------- ----------- ----------- ------------- Net income $ 1,774,000 $ 317,000 $ 2,168,000 $ 421,000 =========== =========== ============ ============= Net income per share: Basic $ 0.65 $ 0.12 $ 0.81 $ 0.16 Diluted $ 0.59 $ 0.12 $ 0.74 $ 0.16 =============== ============== ================= ================ Weighted average number of common and common equivalent shares outstanding - Basic computation 2,721,221 2,644,433 2,669,117 2,644,433 Potential dilutive common shares 263,676 --- 245,169 --- ----------- ----------- ------------ ------------- Weighted average number of common and common equivalent shares outstanding assuming dilution - Diluted computation 2,984,897 2,644,433 2,914,286 2,644,433 =========== =========== ============ ============== </TABLE> See accompanying notes to consolidated financial statements
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS <TABLE> <S> <C> <C> <C> <C> <C> <C> Six Months Ended January 31, (unaudited) 1999 1998 Cash flows from operating activities: Net income $ 2,168,000 $ 421,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 694,000 594,000 Deferred income taxes (1,420,000) --- Provision for bad debt 111,000 --- Amortization of deferred compensation expense net 15,000 12,000 Changes in assets and liabilities: Accounts receivable (1,678,000) (436,000) Inventories (126,000) (925,000) Prepaid expenses and other current assets 44,000 (90,000) Other assets (42,000) (2,000) Accounts payable 1,100,000 (31,000) Accrued expenses and other current liabilities 561,000 775,000 ----------- ------------ Net cash provided by operating activities 1,427,000 318,000 ----------- ------------ Cash flows from investing activities: Purchases of property, plant and equipment (492,000) (175,000) Payment for business acquisition less net cash received (173,000) --- ------------ ------------ Net cash (used in) investing activities (665,000) (175,000) ------------ ------------- Cash flows from financing activities: Notes payable --- 378,000 Principal payments on long-term debt (418,000) (304,000) Proceeds from exercise of stock options 12,000 5,000 ----------- ------------ Net cash (used in) provided by financing activities (406,000) 79,000 ------------ ------------ Net increase in cash and cash equivalents 356,000 222,000 Cash and cash equivalents at beginning of period 2,724,000 1,364,000 --------- ------------ Cash and cash equivalents at end of period $ 3,080,000 $ 1,586,000 =========== ============ Supplemental cash flow disclosure: Cash paid during the period for: Interest $ 107,000 $ 158,000 Income taxes $ 143,000 $ 50,000 </TABLE> Non Cash Items: Non cash items include the issuance of a note payable of $250,000 and the issuance of common stock valued at $528,000 in connection with the acquisitions of new businesses. In fiscal 1998, the Company entered into new capital lease agreements in the amounts of $505,000. See accompanying notes to consolidated financial statements.
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) General The accompanying consolidated financial statements for the six month and three month periods ended January 31, 1999 and 1998 are unaudited. In the opinion of management, the information furnished reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the unaudited interim periods. The results of operations for the six months ended January 31, 1999 are not necessarily indicative of the results of operations to be expected for the full year. (2) Accounts Receivable Accounts receivable consist of the following: <TABLE> <S> <C> <C> <C> <C> <C> <C> January 31, 1999 July 31, 1998 Accounts receivable from commercial customers $ 4,383,000 $ 4,302,000 Unbilled receivables (including retainages) on contracts-in-progress 2,955,000 1,531,000 Amounts receivable from the United States government and its agencies 643,000 269,000 ------------- ------------- 7,981,000 6,102,000 Less allowance for doubtful accounts 281,000 170,000 ------------- ------------- Accounts receivable, net $ 7,700,000 $ 5,932,000 ============= ============= (3) Inventories Inventories consist of the following: January 31, 1999 July 31, 1998 Raw materials and components $ 3,610,000 $ 3,365,000 Work-in-process 3,981,000 4,103,000 ------------- ------------- 7,591,000 7,468,000 Less: Progress payments 915,000 1,333,000 ------------- ------------- Inventories - net $ 6,676,000 $ 6,135,000 ============= ============= (4) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: January 31, 1999 July 31, 1998 Customer advances and deposits $ 1,661,000 $ 652,000 Accrued wages and benefits 1,432,000 1,068,000 Accrued commissions 361,000 452,000 Other 666,000 608,000 ------------- ------------- $ 4,120,000 $ 2,780,000 ============= ============= </TABLE>
<TABLE> <S> <C> <C> <C> <C> <C> <C> (5) Long-Term Debt Long-term debt consists of the following: January 31, 1999 July 31, 1998 Obligations under capital leases $ 1,831,000 $ 2,249,000 Less current installments 714,000 804,000 ------------- ------------- $ 1,117,000 $ 1,445,000 ============= ============= </TABLE> (6) Acquisitions In the first quarter of fiscal 1999, the Company acquired the assets and assumed certain liabilities of two businesses. The acquisitions are being accounted for using the purchase method of accounting with the operations of these businesses being consolidated with those of the Company from their respective dates of acquisition. The excess of the purchase price over the fair value of the net assets acquired and liabilities assumed approximates $1,701,000, which has been included in intangible assets in the accompanying consolidated balance sheet and is being amortized over a 20 year period. (7) Income Taxes The provision for income tax consists primarily of state and local taxes offset in the quarter ending January 31, 1999 by $1,420,000 representing a reduction in the valuation allowance for deferred tax assets. Due to the continued profitability of the Company and the award of certain contracts, the Company believes it is more likely than not that a portion of its deferred tax assets will be realized.
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements Certain information contained in this Quarterly Report on Form 10-Q, including, without limitation, information appearing under Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," are forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Factors set forth in the Company's Annual Report on Form 10-K, filed October 29, 1998, or in the Company's other Securities and Exchange Commission filings, could affect the Company's actual results and could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company in this Quarterly Report on Form 10-Q. Recent Developments During the first quarter of fiscal 1999, the Company formed two new wholly owned subsidiaries. Comtech Wireless, Inc. ("CWI") which is located in Woodbridge, New Jersey will design and manufacture Wireless Local Loop Systems for the rural and remote telephony market. Comtech Mobile Datacom Corp. ("CMDC") which is located in Germantown, Maryland will provide satellite based packet data communication services between remote mobile and fixed assets and home base using an open architecture asset tracking system. CMDC will focus on transportation and energy markets, both commercial and government and will serve customers in the U.S. and elsewhere as satellite resources which offer global reach are deployed over the next few years. In October 1998, the Company's operating unit, CSI, was awarded a contract for approximately $42.5 million by a major U.S. Prime Contractor. The contract is for design, engineering and production of sheltered communication terminals consisting of Comtech digital over-the-horizon and line-of-sight microwave radios and integrated UHF/VHF and HF radios for use in a foreign country. The terminals, configured for mobile deployment, are scheduled for delivery over the next 30 months. COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31, 1999 AND JANUARY 31, 1998 Net Sales. Net sales were $9,057,000 and $7,700,000 for the three months ended January 31, 1999 and 1998, respectively, representing an increase of $1,357,000, or 17.6%. This was primarily due to an increase in sales at CSI, CASI and CCC, partially offset by a decrease in sales at CPST. Sales at CSI are expected to continue to increase as the result of an order received in October 1998 for $42,500,000 for delivery over approximately the next three years. The increase in sales at CCC was partially the result of orders received for recently developed new products. Gross Margin. Gross profit was $2,671,000 or 29.5% of net sales for the three months ended January 31, 1999 compared to $2,130,000 or 27.7% of net sales for the same period in fiscal 1998. Higher gross profits in the fiscal 1999 period were due primarily to the higher sales volume. Higher gross profit margins, as a percent of net sales, were primarily due to the mix of products sold in each period. Selling, General and Administrative. Selling, general and administrative expenses were $1,626,000 and $1,299,000 for the three months ended January 31, 1999 and 1998, respectively, representing an increase of $327,000, or 25.2%. This increase was partially due to the higher level of expense required to support the increased sales volume and partially due to the addition of two new subsidiaries in fiscal 1999. Research and Development. Research and development expenses were $624,000 and $323,000 for the three months ended January 31, 1999 and 1998, respectively, representing an increase of $301,000, or 93.2% increase. This increase was primarily due to expenses for continuing product development and general product improvement Results from Operations. As a result of the foregoing factors, the Company had operating earnings of $421,000 for the three months ended January 31, 1999 compared to $508,000 for the comparable prior year period. Interest Expense. Interest expense was $55,000 and $150,000 for the three months ended January 31, 1999 and 1998, respectively, representing a decrease of $95,000. Interest expense for both periods was substantially due to interest associated with the Company's capital lease obligations. Interest Income. Interest income was $15,000 and $3,000 for the three months ended January 31, 1999 and 1998, respectively. This increase was due primarily to the increase in the amount of cash available to invest in the fiscal 1999 period. Other Income. Other income was $1,000 for the three months ended January 31, 1998. This income was from the sale of scrap materials. Provision/Benefit for Income Taxes. The provision for income taxes was $27,000 and $45,000 for the three months ended January 31, 1999 and 1998, respectively, which principally relates to state income taxes. The Company has NOL carry-forwards to offset Corporate federal income tax and is, until those carryforwards are fully utilized, generally only subject to the alternative minimum tax. The Company has previously provided a full valuation allowance for any deferred tax asset that would result from this NOL and other items that give rise to the temporary differences between the tax liability for financial statements and the actual tax return. Primarily due to the Company's continued profitability, the Company determined it was more likely than not that a portion of the valuation allowance would not be required and, consequently, recorded a deferred tax asset and income tax benefit of $1,420,000 in the quarter ended January 31, 1999. COMPARISON OF THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 1999 AND JANUARY 31, 1998 Net Sales. Net sales were $17,792,000 and $13,634,000 for the six months ended January 31, 1999 and 1998, respectively, representing an increase of $4,158,000 or 30.5%. The increase in sales was due primarily to a higher volume of sales at CSI, CASI and CCC, partially offset by results at CPST. Sales at CSI are expected to continue to increase as the result of an order received in October 1998 for $42,500,000 for delivery over approximately the next three years. The increase in sales at CCC was partially the result of orders received for recently developed new products. Gross Margin. Gross profit was $5,387,000 or 30.3% of net sales for the six months ended January 31, 1999 compared to $4,024,000 or 29.5% of net sales for the same period in fiscal 1998. Higher gross profits in the fiscal 1999 period were due primarily to the higher sales volume. Higher gross profit margins, as a percentage of net sales, were primarily due to the mix of products sold in each period. Selling, General and Administrative. Selling, general and administrative expenses were $3,346,000 or 18.8% of net sales for the six months ended January 31, 1999 compared to $2,728,000 or 20.0% of net sales for the same period in fiscal 1998. The $618,000 increase in total cost was primarily due to the additional expenses required to support the increased sales volume and partially due to the addition of two new subsidiaries. Research and Development. Research and development expenses were $1,150,000 and $590,000 for the six months ended January 31, 1999 and 1998, respectively, representing an increase of $560,000 or 94.9%. This increase was due primarily to expenses for continuing product development and general product improvements. Results From Operations. As a result of the foregoing factors, the Company had operating earnings of $891,000 and $706,000 for the six months ended January 31, 1999 and 1998, respectively. Interest Expense. Interest expense was $107,000 and $228,000 for the six months ended January 31, 1999 and 1998, respectively. Interest expense for both periods was attributable largely to interest associated with the Company's capital lease obligations. Interest Income. Interest income was $34,000 and $9,000 for the six months ended January 31, 1999 and 1998, respectively. This increase was due primarily to the increase in the amount of cash available to invest in the fiscal 1999 period. Other Income. Other income was $2,000 and $4,000 for the six months ended January 1999 and 1998, respectively. This income was from the sale of scrap materials and the proceeds from the sale of fully depreciated equipment. Provision/Benefit for Income Taxes. The provision for income taxes was $72,000 and $70,000 for the six months ended January 31, 1999 and 1998, respectively, which principally relates to state income taxes. The Company has NOL carry-forwards to offset Corporate federal income tax and is, until those carryforwards are fully utilized, generally only subject to the alternative minimum tax. The Company has previously provided a full valuation allowance for any deferred tax asset that would result from this NOL and other items that give rise to the temporary differences between the tax liability for financial statements and the actual tax return. Primarily due to the Company's continued profitability, the Company determined it was more likely than not that a portion of the valuation allowance would not be required and, consequently, recorded a deferred tax asset and income tax benefit of $1,420,000 in the quarter ended January 31, 1999. LIQUITY AND CAPITAL RESOURCES For the six month period ended January 31, 1999, the Company's cash and cash equivalent position increased by $356,000 from $2,724,000 at July 31, 1998 to $3,080,000 at January 31, 1999. Operating activities provided $1,427,000 of cash, investing activities used $665,000 of cash and financing activities used $406,000 of cash. During the period, the Company formed two new wholly owned subsidiaries which acquired the assets and assumed certain liabilities of two other companies. The total consideration for these acquisitions was approximately $978,000 which was financed by a cash payment of $200,000, a promissory note of $250,000 and the balance through the issuance of restricted stock and warrants. The balances at January 31, 1999 include the assets and liabilities of these acquisitions. Net accounts receivable increased from July 31, 1998 by $1,768,000 due primarily to the timing of the shipments and the subsequent collection of the related receivable. The allowance for doubtful accounts increased by $111,000. The Company reviews its allowance for doubtful accounts periodically and believes it is sufficient based on past experience and the Company's credit standards. Net inventory increased by $541,000, primarily due to the higher backlog of orders. The Company generally operates on a job-order cost basis, that is, costs are incurred as work-in-process inventory for specific contracts or "jobs" and, accordingly, inventory levels will vary as a function of the Company's order backlog. The Company does have some product lines which require a more competitive delivery response to customers' requirements and require the Company to provide for a level of "off-the shelf" equipment. The only other general inventory that the Company maintains is for basic components which are common for most of its products. Inventory reserves are reviewed on an ongoing basis and adjustments are made as needed. Intangible assets at January 31, 1999 of $1,731,000 consist of "good will" as a result of the acquisitions referred to above, which is being amortized over 20 years. Accounts payable increased by $1,903,000 primarily due to the increase of inventory purchases. The increase of $1,340,000 in accrued expenses and other current liabilities was primarily due to increases in customer advances and deposits and accrued wages and benefits. The Company made leasehold improvements and purchases of equipment of $492,000. Long term debt (including current installments) decreased by $418,000 due to payments made. All of the Company's long term debt consists of capital leases for its facilities and equipment. In December 1998 the Company renewed its credit facility with Republic National Bank of New York. The total facility available to the Company has increased to $8,000,000. The interest rate on borrowings is Libor plus 1-1/2%. There have been no borrowings against the facility. The Company believes that its current cash position, funds generated from operations and funds available from the credit facility, collectively, would be adequate to meet the Company's foreseeable cash requirements. Year 2000 Compliance Management has initiated a company-wide program and has developed a formal plan of implementation to prepare the Company for the Year 2000. This includes taking actions designed to ensure that the Company's information technology ("IT") systems, products and infrastructure are Year 2000 compliant and that its customers, suppliers and service providers have taken similar action. At this time, management believes that the Company does not have any significant internal problem other than to upgrade some of its software to available new releases which are Year 2000 compliant. With respect to its external issues - customers, suppliers and service providers - the Company is surveying them primarily through written correspondence. Despite the efforts to survey customers, suppliers and service providers, management cannot be certain as to the actual Year 2000 readiness of these third parties. To the extent any of its suppliers or service providers are not Year 2000 ready, the Company believes that it will be able to obtain other suppliers or service providers without a significant interruption to its business. However, there can be no assurance that such interruption will not have a material adverse effect on the Company. To date, the Company has not formulated a Year 2000 contingency plan. The Company is reviewing responses to its inquiries and will determine the need for a contingency plan upon completion of this review. The Company anticipates completing its Year 2000 project in mid calendar 1999. Management currently believes that the costs related to the Corporation's compliance with the Year 2000 issue should not have a material adverse effect on its consolidated financial position, results of operations or cash flows.
PART II OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds (c) In connection with the acquisition by the Company of the assets of Mobile Datacom Corporation ("MDC") on September 24, 1998, the Company issued an aggregate 100,000 shares of Company Common Stock on November 13, 1998, warrants to purchase an aggregate 100,000 shares of Company Common Stock and an aggregate $100,000. The securities were issued in reliance upon the exemption provided in Section 4(2) of the Securities Act of 1993, as amended. The warrants are exercisable for five years from the date of issuance at an exercise price of $9.86 per share. Item 4. Results of Votes of Security Holders (1) At the Company's Annual Stockholders' Meeting held on December 15, 1998, Mr. Fred Kornberg and Mr. Sol S. Weiner were reelected as Directors for a three year term. The votes were as follows: Mr. Kornberg - votes for 2,305,552; votes withheld 19,692. Mr. Weiner - votes for 2,304,992; votes withheld 20,252. .Dr. George Bugliarello and Mr. Richard L. Goldberg continued on as Directors for a term expiring in two years and Mr. Gerard R. Nocita and Dr. John B. Payne for a term expiring in one year Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following exhibits are being filed as part of this Report: Exhibit No. Description 27 Financial Data Schedule as of January 31, 1999. (b) In December, 1998 the Company filed a report on Form 8-K with respect to the declaration of a dividend by the Company's Board of Directors of one preferred stock purchase right for each outstanding share of Company Common Stock payable to stockholders of record on January 4, 1999. The purchase rights are governed by the terms of a Rights Agreement between the Company and American Srock Transfer and Trust Company which is described in the Form 8-K.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMTECH TELECOMMUNICATIONS CORP. (Registrant) Date: March ______ 1999 By: /s/ Fred Kornberg ------------------------------ Fred Kornberg Chairman of the Board Chief Executive Officer and President Date: March ______, 1999 By: /s/ Gail Segui ------------------------------- Gail Segui Secretary and Treasurer