Comtech Telecommunications Corp. (CMTL) filed Quarterly Report for the period ended 2010-11-02.
Comtech Telecommunications Corp. has a market cap of $893 million; its shares were traded at around $31.52 with a P/E ratio of 14.3 and P/S ratio of 1.1. The dividend yield of Comtech Telecommunications Corp. stocks is 3.2%. Comtech Telecommunications Corp. had an annual average earning growth of 25.7% over the past 10 years. GuruFocus rated Comtech Telecommunications Corp. the business predictability rank of 3-star.CMTL is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors.
This is the annual revenues and earnings per share of CMTL over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CMTL.
Highlight of Business Operations:
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $24.0 million and $21.7 million for the three months ended October 31, 2010 and 2009, respectively, representing an increase of $2.3 million, or 10.6%. The increase is primarily attributable to increased cash-based incentive compensation associated with the overall increase in our net sales and profits that we experienced during the three months ended October 31, 2010 as compared to the three months ended October 31, 2009. Our selling, general and administrative expenses for the three months ended October 31, 2010 reflect the impact of cost reduction actions that we have initiated in all of our reportable operating segments to align our staffing with expected future business activity. Amortization of stock-based compensation expense recorded as selling, general and administrative expenses decreased to $1.1 million in the three months ended October 31, 2010 from $1.3 million in the three months ended October 31, 2009.
Research and Development Expenses. Research and development expenses were $10.8 million and $11.3 million for the three months ended October 31, 2010 and 2009, respectively, representing a decrease of $0.5 million, or 4.4%. For the three months ended October 31, 2010 and 2009, research and development expenses of $7.0 million and $6.8 million, respectively, related to our telecommunications transmission segment, $1.3 million and $1.1 million, respectively, related to our mobile data communications segment, $2.2 million and $3.1 million, respectively, related to our RF microwave amplifiers segment, with the remaining expenses related to the amortization of stock-based compensation expense which is not allocated to our three operating segments. Amortization of stock-based compensation expense recorded as research and development expenses was $0.3 million for both the three months ended October 31, 2010 and 2009, respectively.
On September 23, 2010, our Board of Directors approved a dividend program with targeted annual dividends aggregating $1.00 per share. The first quarterly dividend of $0.25 per common share, totaling $6.9 million, was paid on November 22, 2010. On December 8, 2010, our Board of Directors declared a dividend of $0.25 per share to be paid on February 21, 2011 to shareholders of record at the close of business on January 21, 2011. Future dividends are subject to Board approval.
We have a committed $150.0 million unsecured revolving credit facility (“Credit Facility”) with a syndicate of bank lenders. The Credit Facility, as amended on September 21, 2010, expires on January 31, 2014 and provides for the extension of credit to us in the form of revolving loans, including letters of credit, at any time and from time to time during its term, in an aggregate principal amount at any time outstanding not to exceed $150.0 million for both revolving loans and letters of credit, with sub-limits of $15.0 million for commercial letters of credit and $35.0 million for standby letters of credit. The Credit Facility may be used for acquisitions, stock repurchases, dividends, working capital and other general corporate purposes. (See “Notes to Condensed Consolidated Financial Statements – Note (11) Credit Facility”).
In October 2010, we acquired the WAN optimization technology assets and assumed certain liabilities of Stampede for $5.3 million. As of October 31, 2010, $1.2 million of the total purchase price was paid. The next scheduled purchase price payment of $0.3 million is scheduled to be paid in April 2011. Included in the $5.3 million is $3.8 million which represents the fair value of contingent earn-out payments that we expect to make within three years from the date of acquisition. Such amounts are not included in the above table.
On September 23, 2010, our Board of Directors authorized the repurchase of up to $100,000,000 of our common stock. There is no time restriction on this authorization and repurchases may be made in open-market or privately negotiated transactions and may be made pursuant to SEC Rule 10b5-1 trading plans. During the three months ended October 31, 2010, we repurchased 720,996 shares in open-market transactions for an aggregate cost of approximately $20,198,000 (including transaction costs) with an average price per share of $28.01. In addition, during the period October 1, 2010 – October 31, 2010, an “affiliated purchaser,” as defined in Rule 10b-18(a)(3), purchased 5,000 shares at an average price of $28.29 which are included in the above table. As of October 31, 2010, we have the authority to repurchase up to an additional $79,824,000 of our common stock.