Mar 08, 2018 • 08:30 am ET



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Welcome to the Comtech Telecommunications Corp.'s Second Quarter Fiscal 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded Thursday, March 8, 2018.

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

Maria Ceriello

Thank you, and good morning. Welcome to the Comtech Telecommunications Corp. conference call for the second quarter of fiscal year 2018. With us on the call this morning are Fred Kornberg, Chief Executive Officer and President of Comtech; and Michael D. Porcelain, Senior Vice President and Chief Financial Officer.

Before we proceed, I need to remind you of the company's safe harbor language. Certain information presented in this call will include, but not be limited to, information relating to the future performance and financial condition of the company; the company's plans, objectives, and business outlook; and the plans, objectives, and business outlook of the company's management.

The company's assumptions regarding such performance, business outlook, and plans are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. Any forward-looking statements are qualified in their entirety by cautionary statements contained in the company's Securities and Exchange Commission filings.

I am pleased now to introduce the Chief Executive Officer 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 we announced yesterday afternoon, we reported our second-quarter results of $133.7 million in revenues and operating profit of $4.9 million, adjusted EBITDA of $14.5 million and bookings of $210.6 million. We finished the quarter with a backlog of $567.3 million, which is close to the company's record.

Our results for the quarter obviously exceeded our expectations and our business momentum (inaudible) and shows no signs of slowing down. So as such, we have increased our fiscal 2018 revenue target to a range of $570 million to $585 million, increased our GAAP diluted EPS target to a new range of $1.08 to $1.23, and increased our adjusted EBITDA guideline -- guidance to a range of $72 million to $76 million.

As you can imagine, I'm pleased with our business and our accomplishments thus far. I will talk more about our accomplishments later in this call, but first let me turn it over to Mike Porcelain, our CFO, who will provide discussion of our financial results and update our fiscal 2018 guidance in more detail. Mike?

Mike Porcelain

Thanks, Fred, and good morning, everyone. Consolidated net sales for Q2 were $133.7 million, of which approximately 31.5% were from the U.S government, 26.5% from international end customers, and 42% from domestic commercial end customers. During Q2, we achieved a consolidated book-to-bill ratio of 1.57 with both segments achieving a book-to-bill ratio in excess of 1x sales.

As many of you know, Comtech's reported backlog of $567.3 million only consists of funded and/or firm