Comtech Telecommunications(CMTL) - 2024 Q2 - Quarterly Results

Financial Performance - Consolidated net sales for Q2 fiscal 2024 were $134.2 million, a slight increase of $0.5 million or 0.4% year-over-year, but a decline from $151.9 million in Q1 fiscal 2024[15] - Adjusted EBITDA for Q2 fiscal 2024 was $15.1 million, representing an 11.3% margin, compared to $18.4 million (12.1% margin) in Q1 fiscal 2024 and $11.3 million (8.5% margin) in Q2 fiscal 2023, reflecting a 33% increase year-over-year[16][37] - GAAP operating income for Q2 fiscal 2024 was $3.0 million, an improvement from $2.1 million in Q1 fiscal 2024 and a loss of $0.8 million in Q2 fiscal 2023, marking the third consecutive quarter of GAAP operating income[20][35] - The company reported a net loss of $10.558 million for the three months ended January 31, 2024, compared to a net loss of $4.805 million in the same period of 2023[90] - For the fiscal year 2023, the company reported a GAAP net loss of $(14,660,000) and a net loss per diluted share of $(1.21)[97] Sales and Bookings - Total net bookings for Q2 fiscal 2024 were $141.8 million, resulting in a book-to-bill ratio of 1.06x[40] - The company secured a multi-year Global Field Service Representative contract with the U.S. Army, valued at $544 million, which is expected to contribute significantly to net sales in fiscal 2024[24] - Net bookings in the Terrestrial and Wireless Networks segment reached $74.2 million, including a $48.0 million extension for NG-911 services for the State of Washington[67] - Net bookings in the Satellite and Space Communications segment totaled $67.6 million for the quarter, including over $7.0 million from two foreign militaries for next-generation troposcatter solutions[54] Segment Performance - The Terrestrial and Wireless Networks segment achieved 12% sequential growth and 4% growth compared to Q2 fiscal 2023, driven by performance on NG-911 contracts[16] - Terrestrial and Wireless Networks segment net sales were $55.6 million for Q2 FY24, an increase of 12.3% from Q1 FY24 and 4.3% from Q2 FY23[65] - Operating income for the Terrestrial and Wireless Networks segment in Q2 FY24 was $8.1 million, or 14.6% of segment net sales, compared to $3.3 million or 6.2% in Q2 FY23[66] - Satellite and Space Communications segment net sales were $78.6 million for Q2 FY24, a decrease of $1.8 million compared to Q2 FY23, primarily due to lower sales from the PST divestiture and satellite ground station solutions[52] - Operating income for the Satellite and Space Communications segment in Q2 FY24 was $1.9 million, representing 2.4% of segment net sales, down from $3.3 million or 4.1% in Q2 FY23[53] Margins and Profitability - The company reported a gross margin of 32.2% in Q2 fiscal 2024, compared to 34.3% in Q2 fiscal 2023[15] - Adjusted EBITDA for the Satellite and Space Communications segment was $7.1 million in Q2 FY24, a decrease from $8.2 million in Q2 FY23[53] - Adjusted EBITDA for the Terrestrial and Wireless Networks segment improved to $13.7 million in Q2 FY24 from $8.8 million in Q2 FY23[66] - Gross profit decreased to $43.198 million for the three months ended January 31, 2024, down 5.93% from $45.924 million in the same period of 2023[90] Assets and Liabilities - Total current assets increased to $343.245 million as of January 31, 2024, compared to $305.486 million as of July 31, 2023[92] - Total liabilities decreased to $423.301 million as of January 31, 2024, down from $445.727 million as of July 31, 2023[92] - The company’s cash and cash equivalents increased to $39.956 million as of January 31, 2024, compared to $18.961 million as of July 31, 2023[92] Strategic Initiatives - The relocation of the corporate headquarters to Chandler, Arizona, aims to streamline operations and improve efficiency, supporting the One Comtech transformation[77] - The company is targeting net sales and Adjusted EBITDA for fiscal year 2024 to exceed fiscal 2023 levels despite challenging business conditions[71] Research and Development - Research and development expenses significantly decreased to $6.843 million, down 45% from $12.441 million year-over-year[90] Shareholder Information - The weighted average number of common shares outstanding for the three months ended January 31, 2024, was 28.662 million, compared to 27.954 million in the same period of 2023[90] - The weighted average diluted shares outstanding for the six months ended January 31, 2024, was 28,958,000[97]