Comtech Telecommunications Corp. (NASDAQ:CMTL) Q1 2019 Earnings Conference Call Transcript

Dec 07, 2018 • 08:30 am ET

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Comtech Telecommunications Corp. (NASDAQ:CMTL) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to Comtech Telecommunications Corp's First Quarter Fiscal 2019 Earnings Conference Call. Currently all phone lines are in a listen-only mode. Later, there will be an opportunity to ask questions during the question-and-answer session. (Operator Instructions). Please be advised today's program may be recorded.

It is now my pleasure to turn the program over to Mr. Jason DiLorenzo. You may begin, sir.

Executive
Jason DiLorenzo

Thank you, and good morning. Welcome to the Comtech Telecommunications Corp conference call for the first quarter of fiscal year 2019. With us on the call this morning are Fred Kornberg, CEO and President of Comtech; and Michael D. Porcelain, SVP and COO; and Michael Bondi, CFO.

(Forward-Looking Cautionary Statements).

I'm pleased now to introduce the CEO and President of Comtech, Fred Kornberg. Fred?

Executive
Fred Kornberg

Thank you, Jason. Good morning, everyone and thank you for joining us on this call. This morning we will be discussing our results for our first quarter of fiscal 2019. As you can see from yesterday's press release, we're off to a great start and we believe our first quarter results provide a solid foundation for what we anticipate will be a year of revenue and adjusted EBITDA growth. As you are aware because of the recent stock market activity and political headlines in a news, business conditions have become more volatile. Although we are mindful of this volatility, we believe that the overall demand for our products remains strong and we currently do not see any change to our strong current business environment.

As such, we're updating our fiscal 2019 targets as follows. We're increasing our revenue goal to a range of approximately $625 million to $640 million. We're increasing our GAAP diluted EPS goal to a range of $0.95 to $1.08, and increasing our adjusted EBITDA to a range of $84 million to $88 million.

I'll talk more later in this call, but first let me turn it over to Mike Bondi our CFO, who will provide a discussion of our first quarter financial results and after that, Mike Porcelain, our CEO will discuss two business segments. Then I'll come back before opening up to questions-and-answers. Mike?

Executive
Mike Bondi

Thanks, Fred and good morning everyone. As announced yesterday afternoon, we reported our first quarter results of $160.8 million in revenues and operating profit of $7.3 million, adjusted EBITDA of $18 million and bookings of $157.4 million. We finished the quarter with a consolidated backlog of $627.3 million.

Our first quarter results benefited from a shift in sales of approximately $10 million in our Government Solutions segment, which primarily occurred due to accelerated customer fielding schedules. Excluding this impact, our first quarter of fiscal 2019 results were still significantly above our expectations and reflect higher net sales in many of our key product lines. As Mike Porcelain will discuss next, we experienced sales growth in both our commercial and Government Solutions segments.

From a geographic perspective, sales to US based customers were 75.6% of total sales with 24.4% to international customers. On the