Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)

Comtech Telecommunications Corp. (NASDAQ:CMTL)

F1Q09 Earnings Call

December 5, 2008 8:30 am ET

Executives

Stephanie LaMontia - Comtech Telecommunications

Fred Kornberg - President and Chief Executive Officer

Michael Porcelain - Senior Vice President and Chief Financial Officer

Jerome Kapelus - Senior Vice President Strategy and Business Development

Frank Otto - Senior Vice President Operations

Analysts

Tim Quillin – Stephens, Inc.

Tyler Hojo – Sidoti & Company

Mark Jordan – Noble Financial 

Rich Valera – Needham & Company

Chris Quilty – Raymond James

Michael Ciarmoli - Boenning & Scattergood

Operator

(Operator Instructions) Welcome to Comtech Telecommunications Corp’s First Quarter Fiscal 2009 Earnings Conference Call. I would now like to turn the conference over to Ms. Stephanie LaMontia of Comtech Telecommunications.

Stephanie LaMontia

Welcome to the Comtech Telecommunications Corp. conference call for the first quarter of fiscal year 2009. With us on the call this morning are Fred Kornberg, President and Chief Executive Officer of Comtech, Michael Porcelain, Senior Vice President and Chief Financial Officer, Jerome Kapelus, Senior Vice President Strategy and Business Development, and Frank Otto, Senior Vice President Operations.

A news release on the company’s results was issued yesterday afternoon. If you have not received a copy please call me and I’ll be happy to send you one. 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 and objectives, the plans and objectives of the company’s management and the company’s assumptions regarding such performance and plans are forward looking in nature and involve certain significant risk 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 & Exchange Commission filings.

I am pleased now to introduce the President and Chief Executive Officer of Comtech, Fred Kornberg.

Fred Kornberg

Thank you for joining us today for our fiscal 2009 first quarter earnings call. I am proud to announce that despite the unprecedented disruption in the financial markets and reported slowdowns in the global economy our business continue to flourish. Our first quarter was outstanding as we have continued to strengthen our positions in all three of our business segments. Our acquisition of Radyne is a success and is essentially complete. We have a solid foundation upon which to grow in fiscal 2009 and beyond.

I attribute our strong first quarter results to the strength and resilience of our end markets to our distinct leadership in these markets and the innovative and diligent contributions from our world-class employees. Later in this call I will provide an update on each of our three business segments and also provide updated guidance for fiscal 2009. First let me turn it over to Mike Porcelain our Chief Financial Officer who will provide an overview of our financial results for the first quarter of fiscal 2009 as well as provide a detailed update on the status of the Radyne acquisition.

Mike Porcelain

As Fred mentioned it was an outstanding quarter. Let me review the results for the first quarter of fiscal 2009 I’ll start with the top of the income statement and work my way down. Q1 2009 net sales were $191.9 million an increase of 66.7% versus the $115.1 million in Q1 of fiscal 2008. This 66.7% increase reflects incremental sales associated with the Radyne acquisition and significant organic growth across all three of our business segments.

In our Telecommunications Transmission segment net sales for the first quarter of fiscal 2009 were $74.6 million compared to $48.9 million last year. This is an increase of $25.7 million or 52.6%. Despite difficult economic conditions sales of our satellite earth station products increased due to strong demand particularly for our modems which incorporate our carrier-in-carrier technology. Sales also increased due to the inclusion of sales of newly acquired Radyne branded satellite earth station products.

Given the complexity of the Radyne acquisition let me provide some color on some of the individual components in our satellite earth station product line. Sales of both Comtech branded and Radyne branded satellite earth station modems for the first quarter of fiscal 2009 were higher than our expectations.

Sales of Tiernan branded video encoder and decoder products which we acquired from Radyne were lower than expected primarily due to lower sales to our broadcasting customers who experience softness in their end markets. These products are a relatively small portion of our Telecommunication Transmission segment sales and we do not expect sales of these products to increase from current levels for the remainder of fiscal 2009 and in fact these sales may decrease from Q1 levels.

Turning to our Over the Horizon Microwave System product line, net sales of our Over the Horizon Microwave Systems for the first quarter of fiscal 2009 were significantly lower than the first quarter of fiscal 2008 due to lower indirect sales to our North African country end customer and lower sales to the US Department of Defense. Our Telecommunications Transmission segment represented 38.9% of consolidated net sales for the first quarter of fiscal 2009 as compared to 42.5% for the first quarter of fiscal 2008.

In our Mobile Data Communications segment net sales were $81.9 million for the first quarter of fiscal 2009. This represents an increase of $28.9 million or 54.5% versus the first quarter of fiscal 2008. This increase was primarily attributable to increased sales including a large amount of mobile satellite transceiver hardware sales to the US Army for orders placed under our MTS and Blue Force Tracking contracts. As most of you know sales to our MTS and Blue Force Tracking customers are very lumpy and Q1 results were very strong.

Based on the timing of the current delivery schedule for orders that are in our backlog and the anticipated timing of orders that we expect to receive for the remainder of fiscal 2009 sales in Q2 2009 are expected to be significantly lower than our Q1 2009 sales. However, as Fred will discuss in a bit we continue to expect large orders which we will expect will drive revenue in the second half of fiscal 2009.

This quarter, as the result of the Radyne acquisition net sales in our Mobile Data Communications segment also included sales related to the design and manufacture of Comtech AeroAstro’s micro satellites and from their mobile tracking products that incorporate sensor enabled notification or SENS technology. Sales of these products were in line with our expectations.

Our Mobile Data Communications segment represented 42.7% of consolidated net sales for the first quarter of fiscal 2009 as compared to 46% for the first quarter of fiscal 2008.

Turning to our RF Microwave Amplifier segment, as a result of the Radyne acquisition we more than doubled our sales for the first quarter of fiscal 2009. Net sales were $35.4 million an increase of $22.2 million or 168.2%. In addition to incremental sales related to the Radyne acquisition we also experienced increased sales of our solid-state high power broadband amplifiers and high power switches that are incorporated into Defense related systems.

Our RF Microwave Amplifier segment represented 18.4% of consolidated net sales for Q1 of fiscal 2009 as compared to 11.5% in Q1 of fiscal 2008. Of our consolidated fiscal 2009 first quarter sales 28.5% were to international end users, 61.6% were to the US Government with the remaining 9.9% to domestic commercial customers.

Gross profit as a percentage of net sales was 45.3% for the first quarter of fiscal 2009 as compared to 43.9% for the first quarter of fiscal 2008. All three of our business segments contributed to this gross margin increase. Our Telecommunications Transmission segment experienced a high gross profit percentage and it benefited from an overall increase in usage of its high volume technology manufacturing center including incremental production of products for our two other business segments.

Our Mobile Data Communications segment experienced a high gross profit percentage due to a more favorable product mix as well as increased operating efficiencies associated with increased sales related to our MTS and Blue Force Tracking contracts. As I mentioned earlier during the first quarter of 2009 a greater percentage of our MTS sales consisted of hardware sales specifically MTS mobile satellite transceivers. More often than not MTS mobile satellite transceivers are sold along with other products that have lower gross margins. Thus our gross profit percentage in this segment this quarter was high.

Going forward for the remainder of fiscal 2009 we do not expect the same product mix as such our gross margins for our Mobile Data Communications segment is not expected to be as favorable for the remainder of fiscal 2009 as it was in this first quarter. In addition, because our Mobile satellite transceivers are manufactured by our Arizona manufacturing facility whose results are part of our Telecommunications Transmission segment we currently do not expect to achieve the same level of operating efficiencies for the remainder of fiscal 2009 in that segment as we did in Q1 2009.

Our third segment, our RF Microwave Amplifier segment, achieved a higher gross profit margin percentage as well as it benefited from a more favorable product mix primarily as a result of the Radyne acquisition. Our RF Microwave Amplifier product line now includes Comtech Xicom Technology satellite earth station traveling wave tube amplifiers and other products which were sold more than those of our legacy product line.

As mentioned on prior conference calls margins of our legacy high power solid-state amplifiers in Q1 of 2009 were lower than normal as we continued to shift certain complex amplifiers with very low gross profit margins. These low margins primarily resulted from prior technical issues and long production times which we believe we have put mostly behind us.

On the expense side, SG&A expenses were $29 million in the first quarter of fiscal 2009, this was $8.6 million higher than the first quarter of fiscal 2008, however, as a percentage of consolidated net sales SG&A expenses was 15.1% in Q1 2009 as compared to 17.7% in Q1 2008. The decrease as a percentage of net sales is primarily attributable to the successful implementation of our Radyne restructuring plan and the resulting achievement of significant operating synergies.

R&D expenses were $14.1 million in the first quarter of fiscal 2009, 28.2% higher than the first quarter of fiscal 2008. R&D as a percentage of sales was 7.3% in Q1 2009 versus 9.6% in Q1 2008. As a reminder in Q1 of fiscal 2008 we significantly increased our R&D spending in our Mobile Data Communications segment that resulted in a large jump in our Q1 2008 spending.

In addition to normal R&D expenses and as a result of the Radyne acquisition during Q1 2009 we recorded a one-time $6.2 million charge for acquired in process R&D. This charge was not deductible for income tax purposes. Amortization of intangibles with finite lies for the first quarter of 2009 was $1.8 million. This represents an increase of $1.4 million as compared to the first quarter fiscal 2009. Almost all of this increase is attributable to the Radyne acquisition.

Operating income for Q1 2009 was $35.9 million compared to $18.7 million in Q1 2008. As a percentage of sales operating income was 18.7% in Q1 2009 versus 16.2% in Q1 2008. Excluding the one time charge for acquired in process R&D operating income as a percentage of sales was 21.9% in Q1 2009 compared to 16.2% in Q1 2008.

This increase as a percentage of sales reflects the higher gross profit rate I discussed earlier as well as the overall operating efficiencies we achieved during the quarter. Operating income for the first quarter of fiscal 2009 also includes stock based compensation of $2.4 million compared to $2.7 million in the first quarter of fiscal 2008.

Interest expense which primarily represents interest associated with our 2% convertible senior notes was consistent between the fiscal quarters at approximately $700,000. Interest income and other decreased from $4.4 million in the first quarter of fiscal 2008 to $1.3 million in the first quarter of fiscal 2009. The decrease was primarily due to the significant reduction in our cash and cash equivalents primarily due to cash payments for the Radyne acquisition as well as a significant decline in period-to-period interest rates.

As everyone knows these are very turbulent times in the financial markets. As of October 31, 2008, we had over $211 million of cash and cash equivalents and as discussed in our last earnings call we believe we were taking a prudent approach to managing our cash and cash equivalents. During Q1 2009 there was a substantial increase in principal risks associated with maintaining cash and cash equivalents in commercial based money market accounts.

As such, we shifted our investment strategy to an even more conservative approach that now includes investing primarily in government-based money market accounts and purchasing US Treasury obligations. As many of you know, these investments on Sundays earn virtually no interest. As a result, we expect interest income in each of the three remaining quarter of fiscal 2009 to decline significantly from the amount we earned in Q1 2009.

Turning to taxes, our effective GAAP tax rate for the first quarter of fiscal 2009 was 38.7% compared to 34.5% for the same period last year. The higher tax rate in Q1 2009 reflects the fact that we recorded a $6.2 million amortization charge for acquired in process R&D which I mentioned is non-deductible for income tax purposes. In addition, and partially offsetting this charge was a discrete tax benefit of approximately $800,000 principally related to the passage of legislation that included the retroactive extension of the Federal R&E credit from December 31, 2007, to December 31, 2009.

For the remainder of fiscal 2009 and excluding the acquired in process R&D charge and discrete tax benefit I just mentioned our effective tax rate for fiscal 2009 is expected to approximate 35%.

Our EPS on a year over year basis was significantly higher. Excluding stock based compensation and the one time amortization charge for in process R&D non-GAAP EPS for Q1 of fiscal 2009 was $1.07 as compared to $0.59 in Q1 of 2008. On a GAAP basis including amortization of the acquired in process R&D and including amortization of stock based compensation expense EPS was $0.80 per diluted share in Q1 as compared to $0.54 in Q1 of last year.

Earnings before interest, taxes, depreciation and amortization or EBITDA was $50 million for the first quarter of fiscal 2009 compared to $23.9 million for the first quarter of fiscal 2008. Cash flow provided by operating activities for Q1 of 2009 was $2.7 million compared to cash used in operating activities of $9.7 million for Q1 2008.

Now let’s turn to backlog, as of October 31, 2008, our reported backlog was $219.1 million compared to $201.1 million as of July 31, 2008, and $248.9 million as of October 31, 2007. As a reminder, on August 1, 2008, as a result of the Radyne acquisition our backlog increased by approximately $51.4 million thus our adjusted July 31, 2008, backlog on a combined basis heading into Q1 was approximately $252.5 million.

Before discussing the Radyne acquisition further I would like to provide a brief update on certain legal matters all of which are more fully described in our 10-Q filed yesterday afternoon. As discussed on prior earnings calls back in October 2007 Comtech Systems or CSI our Florida based subsidiary received a subpoena from the US Immigration Customs Enforcement Branch of the Department of Homeland Security known as ICE.

The subpoena relates to a Comtech Systems contract with the government of Brazil with potential revenue of approximately $2 million none of which has been recognized to date. Customs detained the inventory until they completed their investigation. As we have mentioned in the past the area of export law is extremely complex.

We believe we made a good faith effort to comply with applicable regulations however, in November 2008 the US Customs and Border Protection Agency of the Department of Homeland Security informed us that is was seizing the previously detained inventory because they believe we did not obtain the proper license from the Department of State. CSI has chosen not to dispute the ruling.

The inventory remains officially seized however, it has now been returned to CSI’s facility in Orlando, Florida. CSI has officially petitioned the US Customs and Border Protection Agency for relief from forfeiture and has requested the goods be officially released. With the State Department’s knowledge CSI has filed an amended license referred to as a Technical Assistance Agreement with the US Department of State and has requested a license for the hardware.

If successful in all of its efforts CSI is hopeful that it may be able to shortly reship the Brazil inventory to its end customer. CSI also believe that there are a number of circumstances including the good faith effort we took to comply with applicable regulations that may mitigate the imposition of any potential fines or penalties in connection with the customs ruling.

In addition to the Brazil matter, and as previously disclosed in our SEC filings the enforcement division of the US Department of State continues to confirm our company wide ITAR compliance for the five-year period ending March 2008. We engaged outside council to review our compliance and provided our findings to the US Department of State. In December 2008 we received feedback from the US Department of State and were requested to provide them with additional information as it related to our findings.

In addition, we have decided to have an independent export compliance audit performed and we will submit those results to the US Department of State for their consideration. Our assessment of internal controls in this area is ongoing and we continue to make improvements in our controls throughout fiscal 2009.

In addition to both export matters there are two other items that I would like to briefly mention. In November 2008 the Telecommunication and Media Enforcements Section of the Anti-Trust Division of the US Department of Justice informed the company that it opened an inquiry into Comtech EF Data Corps $3.9 million July 2008 acquisition of the network backhaul assets and certain product lines of Verso technologies.

The acquired product lines are now owned by Comtech EF Data Corps Canadian subsidiary, Memotec. Given the small size of the acquisition there was no mandatory notification or reporting requirements imposed by law or regulation on the company. The Anti-Trust division has not served a subpoena in connection with this inquiry and to date the company has had only preliminary discussions with the Anti-Trust division.

The company intends to voluntarily meet with the Anti-Trust division this month to further discuss the matter. Putting this into some perspective combined worldwide sales of Verso and Memotec for the three months ended October 31, 2008, were approximately $5.6 million. Of that amount Verso product sales were less than $1 million most of which was overseas.

On the second item, in December 2008, our wholly owned subsidiary, Comtech PST Corp. and its Hill Engineering, each received a subpoena from the Department of Defense requesting a broad range of documents and other information relating to a third parties contract with the DOD and related subcontracts for the supply of specific components by Hill to the third party.

We can tell you that the subpoenas do not allege any specific violations of law either criminal or civil. We have just begun an internal investigation and we intend to fully cooperate and provide the requested documents and other information. Given the early stage of this matter we are unable to predict the outcome of the DOD’s investigation. Additional details on all of these matters may be found throughout our 10-Q which was filed yesterday afternoon.

Now let me provide an update on the acquisition of Radyne and the status of our restructuring plan. We believe our Radyne acquisition is on track to be a resounding success. Without getting into specific revenue splits within each business segment I will tell you that on an overall basis sales of Radyne’s legacy products in Q1 were generally in line with our original expectations.

We believe that with the exception of lower sales of Radyne’s Tiernan branded video encoder and decoder products the inevitable disruption that came with the acquisition and the restructuring initiatives that the owner took our execution has been nearly flawless. Our restructuring timetable is ahead of schedule. As we sit here today we have vacated Radyne’s Phoenix, Arizona, manufacturing facility and moved their satellite earth station operations into our Tempe, Arizona based high volume technology manufacturing center.

We have also fully integrated Radyne’s corporate functions into our existing mobile corporate office. Although there are minor things still open the completion of our restructuring activities came about three to four months ahead of our schedule. As it relates to the facility itself, we completed our negotiations with a sub-tenant for Radyne’s Phoenix, Arizona facility and have now sub-leased the building for a substantial portfolio of the remaining lease term.

As discussed in our year-end conference call we capitalized all of the un-recovered costs of the remaining lease as well as severance for terminated employees as part of purchase accounting. Thus, with the exception of the $6.2 million expense for acquired in process R&D that we recorded in Q1 we do not expect that our P&L for the remainder of fiscal 2009 will be impacted by any other one time charges associated with the Radyne acquisition.

In summary, we remain diligently focused on maximizing value from our Radyne acquisition. I have no doubt that the acquisition was a success and was an efficient and compelling use of our cash. Now let me turn it back to Fred who will provide additional color and insight into our three business segments and also provide an update of our financial guidance for fiscal 2009.

Fred Kornberg

Let’s begin with the business update with our Telecommunications Transmission segment where our two major product lines are satellite earth station products and other the horizon microwave systems. As Mike described earlier our satellite earth station product line is significantly larger product line in this segment achieved outstanding results in the first quarter despite the difficult global economic environment.

We attribute the resilience of this business in the first quarter to a number of factors; first, there remains a shortage of transponder space relative to the current demand and as a result the cost for our customers to transmit via satellite remains relatively high. This dynamic has sustained the strong demand for our satellite modem as their superior efficiency offers a clear and substantial cost savings for our customers.

Secondly, our technology remains a key differentiator. A combination of carrier-in-carrier technology and our patented forward error correction technology enables us to provide our customers with an extremely cost efficient modem. The pay back on the purchase of a modem which is often three months or less can be calculated by our customers in advance of a purchase by using a proprietary software application that we make available to them.

Thirdly, our commercial business continues to benefit from one, the continuing subscriber growth, the transition to a high definition video and the growth of IP TV. Our US Government business also remains strong due to our ability to solve the most challenging aspects of Government satellite communications and that is increased bandwidth capacity. Our carrier-in-carrier enabled modems allow the government to increase satellite bandwidth capacity by maximizing existing satellite transponder capacity by almost better than a factor of 2 to 1.

We are continuing to move forward with our technology leadership by incorporating this carrier-in-carrier technology into our flagship model SLM 5650A government specified modem. We are also doing the same with the Radyne government and commercial modems and expect these initiatives to be completed during fiscal 2009.

Finally, the Radyne acquisition added a large installed base of satellite system customers to our already formidable install base into which we are able to sell our new products. We remain the go to provider of one-stop shop satellite earth station products with the ability to offer existing and new customers a compelling wide range of products and technology.

With Radyne now substantially integrated into our existing satellite earth station business from both a sales and technology sharing perspective we are positioned as one company with the widest array of satellite earth station products to meet the varying needs of our customers. Although our first quarter satellite earth station results were strong we are taking a cautious approach as we look out to the remainder of the year, due to the strains apparent in the global economy.

However, based on our market leadership and the strong market characteristics I just discussed it would not surprise us if the business remained more resilient than we currently anticipate.

We’re also taking a cautious approach in our over the horizon or troposcatter product lines, where we believe we are the worlds leading supplier. This product line allows highly secure point-to-point communications transmission by bouncing a signal off the troposphere a layer of the atmosphere seven miles above the earth. We sell this technology to the US Government, foreign governments, and oil and gas companies.

As highlighted in our last earnings call we have a number of large US Government program opportunities in our pipeline but we continue to be disappointed as these opportunities keep moving to the right. We do expect to book one of these opportunities in fiscal 2009. This confidence is based on a number of factors.

First, we are the sole provider of high data rate digital troposcatter modem technology to the Government, having won the track 170 competition two years ago. We believe we are well positioned to be the supplier of choice to upgrade a number of other important components in those terminals.

Secondly, the Government’s commitment to troposcatter technology as a core communications medium is directly related to the acute shortage of satellite transponder capacity available to meet the Government’s military needs. This technology is an ideal solution by which to offload short to medium range traffic from the bandwidth limited satellite networks to troposcatter systems.

Internationally as we also discussed on prior earnings calls the three foreign government opportunities each with a potential contract value of at least $40 million or more remain promising and substantial. However, each has experienced lending delays. Based on our current assessment and although obviously difficult to predict we anticipate receiving at least one of these orders in the later part of fiscal 2009. We don’t however expect any revenue contribution from these opportunities in fiscal 2009 and expect this revenue to shift completely into fiscal 2010.

Based on our leadership position in this market our innovative technological improvements in the products have expanded our growth opportunities and the expanding appeal of troposcatter as a compliment to satellite transmission we continue to be bullish and confident in our growth prospects in this important product line. Timing, as I mentioned however remains difficult to predict.

Moving on to our Mobile Communication segment this segment now includes our Mobile Data Integrated Solutions area by far the largest business of this segment and our recently acquired Micro Satellite business. Our Mobile Data Integrated Solutions business is driven by our US Army customers where we have provided satellite communications equipment and services for almost 10 years. The significant majority of our Mobile Data Comm. revenues are generated from two Army IDIQ contracts.

The first contract is MTS which is a $605 million three year IDIQ contract where we provide and end-to-end satellite based communications system providing logistics and combat support units with a secure real time global two-way messaging, vehicle location and tracking capabilities. Through this network we enabled the US Army to enhance troop safety as well as enable total asset visibility within any operational theater.

MTS remains a critical high priority program for the US Army as demonstrated by the continuing financial commitment to the program. To date, we have received over 140 million in orders under this $605 million MTS contract. While the MTS orders received to date have been significantly lower than the amount of currently available funding we believe that this is a short-term timing issue rather than a decline in end user demand in which we expect will be corrected shortly. In fact, we believe that overall demand for our Mobile Data Communications products and services has never been stronger.

In the past few months we have been in active discussion with the MTS program office concerning their strategic initiative to seek an upgrade to the existing MTS computer. This initiative we believe is the reason for the delay in placing new orders. We believe that a decision will be reached soon and we expect that orders will resume at a robust rate which means that our MTS revenue will be back end loaded for fiscal 2009 and a good amount will spill over into fiscal 2010.

Funding for the MTS program remains significant and unchanged since our last conference call. Based on public US Army documents we continue to believe an aggregate of $329.6 million of approved and appropriated funding remains in the Army’s budget to fund the MTS program orders in fiscal 2009 and beyond.

The $329.6 million includes the following; $186 million in aggregate still unused from the fiscal 2008 budget including both base and supplemental budget funding and $143.6 million in aggregate from the fiscal 2009 base and supplemental budget that was signed into law in September 2008.

In addition to the demand by the US Army I pointed that out during our last earnings call that the National Guard recently made MTS a top 10 priority. We believe that the National Guard fielding levels are significantly short of their initial fielding goals which were established in 1999. To date, we’re not aware of any specific current fiscal year funding that the National Guard has received. However, we believe that some of the current MTS budget funding may be used to meet the National Guard demand.

The second contract depending on Mobile Data Integration Solutions products is Blue Force Tracking, a $260 million five year IDIQ contract with Seacom the communications electronics command. Here, Comtech provides the satellite communication backbone for FBCB2 battle command real time situational awareness and control systems. We provide mobile satellite transceivers, satellite bandwidth, satellite network operations and engineering services for the BFT system.

To date, orders received from BFT total $161.6 million against the $260 million contract ceiling. Because of the strong demand from our BFT customer we are nearing a contract ceiling issue with orders received to date aggregating almost 75% of the current contract ceiling with three more years to go on the contract.

In order to address this impending contract ceiling issue as well as to ensure the long-term seamless continuity of this program the FBCB2 program office issued an important public notice on November 18, 2008. Through this public office BFT is conducting a market survey seeking resources necessary to provide engineering, tests, and hardware support for the BFT operations centers as well as satellite services and additional hardware to support the worldwide BFT satellite network. The date of an award is anticipated to be no later than December 2009.

In addition to the performance period extension, the notice stated that the government may increase the Comtech BFT IDIQ contract value by $617 million an increase of almost 300% from the existing $260 million contract value and expects to spend the contract by two years to December 2013.

Assuming the new contract that comes effective in December 2009 as anticipated in the BFT notice average annual funding under the remaining contract term would increase from approximately $50 million today to approximately $154 million annually which translates into a tripling in demand for the contract period beginning December 2009.

In addition to the highly favorable implications of significant funding and performance period increase the Government’s notice included a number of vendor requirements that we view as a very encouraging item to Comtech and its efforts to maintain our incumbent position, as BFT primary satellite equipment and telecommunications service provider.

First, the notice states that, “Comtech Hub equipment for their operational equivalent must continue to be used to allow the current FBCB2 BFT Network to continue to operate without interruption.” Secondly, the notice states, “The contract that will be responsible to develop a plan that provides continuous support for the user.” In our view, these two statements demonstrate the critical importance of the BFT network to guarding safety of our troops in theater and the complete intolerance to any potential risk during a transition period.

This position by the customer is highly consistent with the view that we have shared with our investors over the past 18 months. In our comments we have emphasized our belief that our established incumbency and proven experience are key elements in our effort to retain and build our program presence. We believe strongly that Comtech offers the BFT customers a low risk technology proven partnership uniquely able to meet their revolving operational demands.

There are several key factors substantiating this belief. First, our six years of experience as the provider of satellite transceivers, network hardware, and telecommunications services to the BFT program. Second, our significant organizational and financial investment in both improving the current BFT network and our transceiver capability. Third, our ability as the incumbent to eliminate the programs expected transition risk as they move toward deploying and implementing the next generation system.

Finally, our ability to provide low cost, low risk, new and forward looking technology that is fully backwards compatible to an existing install user base that we estimate could exceed more than 100,000 transceivers by 2011. Considering the unprecedented budget challenges for all Federal programs costs, we believe, will become an even more important factor to a final decision.

These facts, we believe, position us very strongly with the BFT program to continue to provide long term support as a key program partner and to successfully capture future competitive awards and in particular any follow on contracts released by the program offering.

In that regard, our BFT upgrade initiatives remains on track with a series of important accomplishments achieved in the past quarter. We have leveraged our in depth knowledge of the BFT program, demand in hardware, network and next generation transceiver and satellite network that we are confident offers to BFT customer a compelling solution that compares favorably to any other solution that may be considered.

While we appreciate that our investors are ready to glean more specific facts about our progress on this initiative we believe that the most professional and sensible approach in this situation is to continue to fly under the radar to keep our heads down and focus on the task at hand. Historically we have found this approach to the most effective.

The last segment I will discuss today is our RF Microwave Amplifier segment. Substantially all of our growth in our RF Microwave Amplifier segment this quarter was the result of our Radyne acquisition. We more than doubled the size of our Microwave Amplifier segment by becoming a leader in the satellite earth station high power-traveling wave through amplifier market.

We believe that our fiscal 2009 order flow will continue to be strong. Our high power product line which consists of the line of traveling rates tube amplifiers and solid-state amplifiers continues to demonstrate tangible success addressing the satellite communications markets in the US and overseas. In particular we continue to experience strong demand from the US Government either directly or through sales to US Prime contractors including among others L3, Harris and [Racio].

In addition, non-Government demand remains strong, driven by domestic and international sales in a direct to home signal newsgathering and KA band uplink markets.

During this quarter we announced a follow on order of $2.9 million for the ground multi-band terminal program or GMT as well as an order from the Air Force for KA band amplifier to support US Air Force airborne platform. Our KA band solid-state amplifiers are poised for continuing growth due to the DOD’s opening up of KA band satellite frequencies. This is a result of excessive demand on the military’s X-Band satellite channels and of the high cost to the military of using commercial KU band satellite transponder.

The means that the existing satellite ground stations infrastructure which addresses the CK and KU bands must be upgraded to also offer the KA band frequency. We have one significant business related to these KA band upgrades by offering a compelling line of traveling rate tube amplifiers and solid-state amplifiers. More generally, we expect to continue to benefit from the US Government’s multi-year initiative to upgrade and add significant satellite capacity to alleviate demand on its overtaxed network.

Our non-satellite wide band solid-state amplifier product line also enjoyed a strong start to fiscal 2009. While CREW 2.1 or a counter remote control IED electronic warfare program orders provided the foundation for the quarter we continue to experience success with other companies and customers in the electronic warfare and counter mission market.

While we believe that we will continue to benefit from follow on orders related to the CREW 2.1 program in fiscal 2009 we also believe that a substantial portion of future 2009 orders for a variety of applications both military and commercial will come from a broader group of blue chip customers.

Our two amplifier product lines are expected to generate incremental value over time by sharing new technology, development and cross selling of each others product and this endeavor has already started and in underway.

Before I turn to guidance let me conclude by reiterating the remarkable performance by all three of our business segments during this unusually turbulent market environment. This I believe is a testament to our strong market leadership position. Now let’s move on to guidance and provide some closing remarks.

As I have stated many times in the past our ability to provide revenue and EPS guidance is dependent upon a number of factors many of which are beyond our control. These factors include by are not limited to; one, the timing of bookings and related revenues on large contracts such as MTS, Blue Force Tracking, CREW 2.1 as well as our large opportunities in our over the horizon microwave commercial and government market.

Two, the uncertainty, particularly in today’s economic environment of potential US and foreign government budget constraints. Three, the economic conditions particularly in the current uncertain economic environment in which we are operating which could have a material impact on capital intensive communications expenditures.

On the revenue side there’s no question that in the first quarter we skirted challenging global economic environment. Although our results so far have been strong for now we’re taking a cautious approach as we look out to the remainder of the year. Thus, we intend to tighten our fiscal 2009 revenue guidance to $740 million and $748 million from $740 to $755 million. Our caution is related to the strains apparent in the global economy which have already and are expected to negatively impact sales of Radyne’s video encoding and de-coding products during 2009.

Too, our tightened guidance also reflects the fact that we are pushing out any large over the horizon international revenue opportunities into fiscal 2010. Finally, we also expect a portion of the expected US Government over the horizon order and some of the MTS orders to ship into fiscal 2010.

Despite our cautious revenue guidance and the fact that we’re significantly reducing our estimates of interest income for the remainder of fiscal 2009 we feel comfortable increasing both our GAAP and non-GAAP EPS guidance by approximately $0.05 per share. This $0.05 per share net increase is primarily attributable to incremental operating efficiencies across our business as well as the benefits from the passage of the retroactive R&E tax credit. This was partially offset by a lower interest which Mike mentioned earlier.

Thus, when you bake everything in our updated reported diluted GAAP EPS guidance is $2.87 to $2.91. If you exclude the one time in process R&D charge of $0.22 our diluted GAAP EPS guidance would have been $3.09 to $3.13. Our updated non-GAAP EPS which excludes both the acquired in process R&D charge and stock based compensation is $3.31 to $3.35.

In conclusion I am confident that we are on track for another record year in fiscal 2009, our 7th record year in a row. Now we will be happy to answer your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Tim Quillin – Stephens, Inc.

Tim Quillin – Stephens, Inc.

Could you go over the backlog by segment?

Michael Porcelain

We finished Q1 2009 with $219 million of backlog, $67.5 million in the Telecom segment, and $69.6 million in the Mobile Data Com segment and $82 million in the RF Microwave Amplifier segment.

Tim Quillin – Stephens, Inc.

Is there anything you can tell us about the Radyne revenue contribution in the quarter? I think maybe your original full year expectation was $140 to $145 million should we divide that by four and $35 to $36 million in first quarter is about right?

Michael Porcelain

What we’d kind of guide you to is on an overall basis the Radyne revenue was sort of in line with our expectations. Back then we had better sales of the Radyne modems as I mentioned offset by declines in the Tiernan video and core product lines. On a quarterly basis going forward we don’t think its meaningful to start looking at the Radyne modem sales as a benchmark if you will as Fred had mentioned we’ve combined our sales forces in our satellite earth station business. Whether or not folks buy a Comtech EF Data Modem or Radyne branded modem to us it’s going to be not meaningful.

Tim Quillin – Stephens, Inc.

Can you remind us how big Tiernan is or what the contribution there is?

Michael Porcelain

When we had purchased Radyne we were sort of estimating anywhere between $15 to $20 million of revenue for that product line.

Tim Quillin – Stephens, Inc.

It’s going to be lower than that though?

Michael Porcelain

We think for fiscal 2009 it’s not going to increase from the Q1 levels and it’s a good chance given the economy and the impact in their customers end markets sales will be lower.

Tim Quillin – Stephens, Inc.

In the 10-Q you said regarding the satellite earth station business that it may be hard to achieve the levels that you had in the first quarter. You discussed it with some caution this morning but is it just that you’re assuming that the global macro economic situation eventually will impact it or are you seeing something particular in that business that gives you reason for pause.

Michael Porcelain

When we gave our guidance back in September we made an assessment of where the market was going to be for the year. At that time we didn’t see any weakness in our satellite earth station business and sort of assumed that consistent with our prior year we have some seasonality quarter to quarter. Q1 we kind of knew was going to be a little strong and as normally our Q4 is higher than the Q2 and Q3.

Sitting here today with the economy deteriorating from the last time our results in Q1 were spectacular and its going to be real tough to see if we could achieve them in Q2. We’re kind of sticking with our original plan in that business but as Fred mentioned we could be surprised if sales increase.

Tim Quillin – Stephens, Inc.

What are your cash flow expectations for the year still was it $75 to $90 million in free cash?

Michael Porcelain

Based on the timing of our anticipated orders from the MTS program office on the cash flow side we’re probably looking at cash generating back in Q4 of 2009 and some of that cash will slip into 2010. We look at cash and total to be a range of about $250 to $265 million at year-end.

Operator

Your next question comes from Tyler Hojo – Sidoti & Company

Tyler Hojo – Sidoti & Company

What do you plan on doing with that cash? I know it’s a question that comes up with you guys often but you have the converts coming due in February and then maybe just if you could generally talk about the potential share repurchases at this level?

Fred Kornberg

We probably will continue with our cash position for a while looking for acquisitions and also we’ve discussed share repurchases in the past and we will continue to do so. For the moment I think we will be hording that cash and looking for some more acquisitions.

Tyler Hojo – Sidoti & Company

In regards to the push out on some of the large over the horizon opportunities, my impression from some of your comments on the last conference call was that that was basically a miniscule portion of what you were looking for in the guidance. First, why is that getting pushed out? What are you seeing that’s leading to a little bit more conservatism there? Is the reduced sales guidance maybe a little bit more to some of the other uncertainties as opposed to the push out?

Fred Kornberg

As we mentioned the uncertainties continue to be mainly in the over the horizon area. We’ve addressed this in a number of telephone calls in the past. We’re obviously disappointed that things keep moving to the right. The opportunities are still there we haven’t lost them; in fact we’re a subcontractor for some large primes in those areas. We depend upon them to finally negotiate their contracts and that’s just taking longer. Large contracts just take a long time.

Our caution really is we’ve moved out some of that revenue that we had in 2009 most of it now is in 2010. Also, as Mike mentioned, some of the weaknesses in our Tiernan business has caused us to be kind of conservative on the top line area. The good news is that we’re still able to increase our EPS guidance and the good news is a lot of these revenue possibilities are really falling into 2010.

Operator

Your next question comes from Mark Jordan – Noble Financial 

Mark Jordan – Noble Financial 

I’d like to talk a little bit about operating margin on the Telecom group. If you add back the in process charge you would have been about 29.7% on the operating margin you said that clearly benefited from the higher through put related to the manufacturing of MTS. If MTS had been at last quarters rate of about $50 million what would have been the operating margin at Telecom?

Michael Porcelain

Very difficult in this room to tell you that. What I would guide you to is our annual guidance that we gave you last time as well as here. This was more of a timing issue between the quarters as well as product mix throughout the year. On a year to year basis we continue to see operating margins going down slightly due to the overall product mix change in that segment. Looking at last year for the full year on Telecom Transmission was about 27% and we would expect it to be a couple points lower than that for the full year.

Mark Jordan – Noble Financial 

Relative to the MTS contract you said that there was a delay potentially tied around getting the approval of a new computer terminal for that system. Are you providing that terminal or is that coming from another party and how much build to you have on the timing of that decision?

Fred Kornberg

We will be providing the computer as we have in the past as part of our system. Unfortunately this computer development has taken longer than anticipated. It is direct procurement by the Government for us to buy this particular computer. The Government has chosen that computer. It is not fully developed and the delays have been there to try to incorporate this new computer rather than using the old computers. This has taken some time but I think we’re there, we’re almost there. I would certainly expect something in the next 60 days.

Mark Jordan – Noble Financial 

You started the first quarter with about $111 million in backlog if you throw in the Radyne piece at Mobile Data, you converted about 73% of that to sales. You’re coming into this quarter with a backlog at $69 million. If you apply that similar ratio that would imply you’d be $45 to $50 million in revenues in the current quarter at Mobile Data is that a reasonable way of looking at it?

Michael Porcelain

I think it is.

Operator

Your next question comes from Rich Valera – Needham & Company

Rich Valera – Needham & Company

To revisit the MTS upgrade, to be clear, there’s not competitive element there this is purely at this point your dependant to some degree on a third party delivering a computer terminal that’s been chosen by the DOD is that a fair characterization?

Fred Kornberg

That’s correct.

Rich Valera – Needham & Company

In RF Amplifiers you actually had no operating margin there this quarter obviously I guess due to the low margin products from your historic business there as you work through that low margin inventory can you give us a sense of how you expect the operating margin trajectory of RF Amplifiers to trend in the remainder of the year?

Michael Porcelain

Let me first address something, the Amplifier margin itself reports negative operating margin but that negative margin includes an allocation of the in process R&D charge. As disclosed in our 10-Q the charge that hit the Amplifier segment was $3.3 million, the other piece went in the Telecom Transmission Group. When you look at the RF operating margin without that charge the segment did about 9% operating margin. That 9% included the low gross margin amplifiers.

Year over year if you look at our last year operating margin which was about 7% Q1 we did 9%, we do expect operating margin in the RF Microwave Amplifier segment to increase from that 9% throughout the year as we continue to ship out those low margin amplifiers. Really by the second half that stuff will be cleaned out of the back and we will be close to the 10%, 11% range on the operating side.

Rich Valera – Needham & Company

With respect to the MTS border push out if you will it sounds like that may be the third factor in your somewhat revenue caution here. It sounds like OTH push outs maybe being the first one I think you mentioned some more conservative outlook on Tiernan then is MTS push out the third most significant factor in somewhat more cautious back half revenue outlook is that a fair characterization?

Fred Kornberg

What I was trying to say there is that its back end loaded for this fiscal year 2009. We expect the orders to be probably larger than anticipated and some of it probably will go into 2010.

Rich Valera – Needham & Company

On the US Government OTH opportunity is there any that you said you expect you could land an opportunity, an order in this year. Can you put any bounds around the potential size is at as you have for the international opportunities?

Fred Kornberg

We’d rather not. Obviously as you can imagine this a highly sensitive and competitive area and hasn’t been fully negotiated yet. Rather than give you a number let me say it’s not as large as the Algerian opportunities but certainly large.

Operator

Your next question comes from Chris Quilty – Raymond James

Chris Quilty – Raymond James

On the Telecom business and specifically earth station you talk about the ROI characteristics associated with the carrier-in-carrier technology do you have any sense of maybe a percent basis, what percent of your sales are being driven by the upgrade ROI directed activities versus just normal ongoing customer build outs?

Fred Kornberg

No, we couldn’t address that right now. It’s very, very difficult to break that out because in any given contract the variety of modems they include the carrier-in-carrier and non carrier-in-carrier enabled modems. It’s very, very difficult to actually predict the portion of sales that go into that area.

Chris Quilty – Raymond James

Do you think given the current economic backdrop those ROI characteristics may help you to offset market softness, capture market share or grow the business in any way?

Fred Kornberg

Absolutely, I think we’ve said that many times in the past. I think the ROI aspect of that particular technology essentially gives the customer; I think I mentioned the payback of three months or less. It’s just a great cost effective way to communicate. In terms of the times that we have right now a cost obviously is a fact, it’s turbulent out there and it has in the past given us market share capture from our competition and I believe that will continue.

Chris Quilty – Raymond James

In the area of BFT and the possible contract expansion I think the survey notice says the proposed contract is anticipated to be awarded in December of ’09 so we’ve got about a year before we hear anything definitive but would you expect to get some other indication that we can hang our hat on between now and then in terms of a specific RFP or what would the process look like.

Fred Kornberg

I think our experience would be such that notices from the past is December ’09 I think is the outer limit and I think we expect the contract to be no later than December ’09. I could be much earlier as well. It depends really how many people answer that notice. So far we hope its one.

Chris Quilty – Raymond James

With regard to the Radyne acquisition and product line consolidation I haven’t seen and maybe I missed it, any announcements of product lines that have been outright cancelled. Can you comment on whether there have been and just give us a sense of what the customer reaction has been? Of course there was the initial reaction to the announcement but now that you’ve been able to go out there and talk to the customers what there general feedback is on the transaction and the products that they’re seeing?

Fred Kornberg

The first part of the question is we have told all the Radyne customers that will fully support the Radyne product line as they are using it now or had planned to use and we will continue to build that product line for their systems as they exist today. Obviously in new systems we would be promoting some of the Comtech products specifically in the carrier-in-carrier. However, as I mentioned in the presentation we are putting that technology into some of the Radyne modems as well both military and commercial and we’ll continue to offer those products to those customers.

Operator

Your next question comes from Michael Ciarmoli - Boenning & Scattergood

Michael Ciarmoli - Boenning & Scattergood

On the expenses with SG&A can you give us some context around how these various legal issues are maybe lifting your overall expenses?

Michael Porcelain

The way we’re looking at it, obviously we’re a much bigger company than we were a year ago and the company has grown. As we get bigger our legal expenses have increased in the last two years. We had the export issues last year so year over year there’s not a real significant change in our legal expenses from year to year. I don’t expect us from a legal expense to have any material increase in our spending.

That will be reflected in our SG&A. We’re looking at it as a bucket of spending and I think the way we would point you to look at is as a result of the Radyne acquisition as a percent of revenues it’s going down.

Michael Ciarmoli - Boenning & Scattergood

Are you also bundling in there the internal control measures or audits you guys are conducting?

Michael Porcelain

Yes we are.

Michael Ciarmoli - Boenning & Scattergood

It looks like there was a big jump in receivables in the quarter anything going on there to read in to?

Michael Porcelain

Don’t forget that on August 1st we had all of the receivables from the Radyne balance sheet that were included. I think in the Q we talk about maybe 50% of the total receivables being from the US Government at 10/31/08.

Michael Ciarmoli - Boenning & Scattergood

You provided an EBITDA guidance on the last call of $164 to $166 million do you have an update for what we can look for, for EBITDA?

Michael Porcelain

The last time we gave you EBITDA guidance of about $164 to $166 million we gave it to you just to give you a sign of the power of the year over year change with the Radyne acquisition. We’re not going to give quarterly updates on EBITDA but obviously we are raising our EPS you guys can do the math and come up with something yourself.

Michael Ciarmoli - Boenning & Scattergood

Getting back to the Blue Force Tracking opportunity and its market survey is it too early to tell if the Government since the size of the opportunity ceiling being listed by a good amount that they would go with some sort of dual source to vendor approach or do you guys not have that insight right now?

Fred Kornberg

We’re taking this synopsis that the Army put out as just a raise in our contract and no competition. Obviously they are and they have to go out and see if there are any interested parties to avoid any difficulties with this contract with us. We just see that as just an addition to our contract.

Michael Ciarmoli - Boenning & Scattergood

With other talk out there from the DOD about a troop surge in Afghanistan do you guys have a sense as to what your replacement or repair opportunities might be from transceivers that have been in Iraq that are going to move to Afghanistan, any context around what that opportunity could look like, or again too early to tell?

Fred Kornberg

We see it as an opportunity but we really at this time we can’t quantify it.

Operator

Your next question comes from Tim Quillin – Stephens, Inc.

Tim Quillin – Stephens, Inc.

How low is interest income going to be what kind of rates are you getting right now?

Michael Porcelain

The other day I bought a $5 million US Treasury and earned $18 of interest for the month. It’s one of the reasons that we’re not going to give EBITDA guidance on a quarterly basis we just really don’t know how these interest rates are going to go over the next couple quarters but certainly it’s going to be a lot lower than it was in Q1 2009. I think we gave you a percentage for the year but you guys could watch the rates and see where they are but I think its fair to it will be way under 2% for the year.

Tim Quillin – Stephens, Inc.

I think you’re able to potentially buy in your convertible notes in February is that something you’re considering and what would be the mechanics of that?

Michael Porcelain

We obviously haven’t made any decision on what we’re going to do. We are evaluating it both December and January. If we were to do a call for cash which is our only option from the indenture more than likely given the stock price of where it is today the note holders would be in a conversion period and more than likely they would exercise their conversion option which would result in the company having to make a decision of whether or not we pay cash or stock. It’s probably more like that we would convert into stock than it would be into cash but we just haven’t made those decisions yet.

Tim Quillin – Stephens, Inc.

Is there anything that you can tell us about the DOD subpoena? I know sometimes it’s a little difficult to figure out what they’re doing but by the type of paperwork or what they’re looking at do you have any sense of what they’re after?

Michael Porcelain

The matter is really at a very early stage. We’ve had some preliminary discussions with the DOD about the information they’d like to obtain. We certainly can tell you that we intend to cooperate with their investigation. The thing that’s important to us as of today we can tell you that the subpoenas do not allege any specific violations either criminal or civil concerning our contract with our third party. That said, we’ve just begun an internal investigation to determine what the issues may be with the subcontract.

Operator

Your next question comes from Mark Jordan – Noble Financial 

Mark Jordan – Noble Financial 

Your guidance of cash at $250 to $265 million at year-end I get that if you do all the converts if you did the converts that could possibly be $105 million lower?

Michael Porcelain

If we wound up calling it for cash that would be correct.

Mark Jordan – Noble Financial 

Relative to the Brazilian issue, on the last call it kind of seemed like you were had gotten good informal comments from the investigators there and now the hardware was seized and its now back in your warehouse. Could you give us a little more detail as to what has transpired and do you see some timeframe for final resolution of this issue?

Michael Porcelain

The way I would tell you to think about it is we’ve had some very open dialogue with both the State Department as well as the ICE agent for a long time. The conversations have been pretty cooperative both on their end and our end. We’ve just ultimately chosen not to dispute the ruling that the Customs and State Department took here. It was a voluntarily agreed that they would return the equipment to us. I think we’re very hopeful of getting that equipment released and be able to ship that to the Brazil end customer. I think the timeframe we use here internally is shortly.

Operator

Your last question comes from Chris Quilty – Raymond James

Chris Quilty – Raymond James

A clarification I think you indicated from your explanation but on the BFT survey document although it didn’t specifically talk about second-generation capabilities with improved response times and bandwidth presumably when you look at a large contract extension it would include those developments that you’re actively doing for the customer.

Fred Kornberg

We can’t really say. Obviously it is one possibility that something like that could be added to the contract for the next generation. I think if you read into the contract where it’s specifically quoted that Comtech network the Comtech transceivers and the Comtech waive forms should be used. That pretty well tells you that it’s the present generation. Could there be additional line items put into this $617 million contract? Yes there could be for additional prototypes or additional development of the next generation.

Chris Quilty – Raymond James

Its seems pretty obvious that they’re not going to want to stick with legacy equipment in the long term given that they’re paying money through [Northrop Dobias] to develop next generation and you guys have been spending a lot of money on next gen that there’s got to be a way to migrate this contract.

Fred Kornberg

You have to really understand the next generation is a very much more robust system and with more data through put and more capability comes a higher price. It’s a matter of funding. It’s a matter of what will do the job for what time period. Certainly after 2013 I think we all expect to be in the next generation.

Chris Quilty – Raymond James

We’re obviously going to be pulling troops out of Iraq at some point maybe slower than people expected as they shift into Afghanistan you have a great position in the Iraqi theater because of the dominance of US forces but you’ve got a lot more NATO forces in Afghanistan which if I’m correct are using a different Blue Force Tracking technology than you supply today is that correct? How does that impact you in the long term as that shift happens?

Fred Kornberg

As you know we’re also part of the NATO BFT tracking system so we supply capability technology in that area. What we’re all looking for really is not a NATO surge but an American surge of troops and the Americans will be using their BFT system.

Chris Quilty – Raymond James

At some point we don’t want to shoot them and we don’t want them shooting us so these things need to work together.

Fred Kornberg

That’s already there. I think the two systems do work together.

Thank you very much for joining us today and we’ll talk to you in about three months.

Operator

Thank you for joining us this does conclude your teleconference you may disconnect at any time.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Comtech Telecommunications Corp. F1Q09 (Qtr End 10/31/08) Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts