Comtech Telecommunications Corp. (NASDAQ:CMTL) Q1 2018 Earnings Conference Call Transcript

Dec 07, 2017 • 08:30 am ET


Comtech Telecommunications Corp. (NASDAQ:CMTL) Q1 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to Comtech Telecommunications Corp.'s First Quarter Fiscal 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded on Thursday, December 7, 2017.

I would now like to turn the conference over to Ms. Maria Ceriello of Comtech Telecommunications. Please go ahead, ma'am.

Maria Ceriello

Thank you, and good morning. Welcome to the Comtech Telecommunications Corp. conference call for the first quarter of fiscal year 2018. With us on the call this morning are Fred Kornberg, CEO and President of Comtech; and Michael D. Porcelain, SVP and CFO.

(Forward-Looking Cautionary Statements) I am pleased now to introduce the CEO and President of Comtech, Fred Kornberg. Fred?

Fred Kornberg

Thank you, Maria and good morning, everyone, and thank you for joining us on this call. As announced yesterday afternoon, we reported our first quarter results of $121.6 million in revenues and operating profit of $0.2 million and an adjusted EBITDA of $9.6 million. Additionally, we reconfirmed our fiscal 2018 revenue target range of $550 million to $575 million and increased our adjusted EBITDA guidance to a range of $69 million to $73 million.

During the first quarter, we received a number of large strategic contract awards and achieved bookings of $165.7 million. Order flow for many of our products was very strong and we finished the quarter with a consolidated backlog of $490.4 million. Our first quarter results exceeded our expectations and I'm pleased with our current business momentum, and it looks like fiscal 2018 is really beginning to look like a very strong year.

I will tell you why I'm so optimistic about our future in a bit, but first let me turn it over to Mike Porcelain, our CFO, who will provide a discussion of our first quarter financial results and our updated fiscal 2018 guidance in more detail. Then, I'll come back before opening it up to questions and answers. Mike?

Michael Porcelain

Thanks, Fred and good morning, everyone. Consolidated net sales for Q1 were $121.6 million of which approximately 32.4% were generated from US government end customers, 23.3% from international end customers and 44.3% from domestic commercial end customers. During Q1, we achieved bookings of approximately $165.7 million with strong order flow across many of our product lines. We achieved a consolidated book-to-bill ratio of 1.36 and both segments achieved a book-to-bill ratio in excess of one-time sales.

Net sales in our Commercial Solutions segment were $76.1 million as compared to Q1 of last year, which were $76.2 million. Sales in this segment represented approximately 62.6% of total net sales. The slight decline in sales in this segment is primarily due to timing. This quarter was a terrific quarter for bookings. Our Commercial Solutions segment achieved a book-to-bill ratio of 1.48.

On a product line basis in our Commercial Solutions segment, overall market conditions for our satellite earth station solutions continue to be good, and it was a great quarter of bookings.