Supercomputer class electronic warfare simulator

Net income in the quarter rose 76.2 percent to a record $1.58 million, or $0.23 per diluted share, from $899,000, or $0.17 per diluted share, in the corresponding period a year earlier. Third quarter sales increased 47.3 percent to $35.8 million from $24.3 million in the year-earlier period.

The Company primarily attributed the improvement in sales to its growing electronic warfare simulation business, resulting from the acquisition and business combination of Advanced Systems Development, Inc. in 1996, and Amherst Systems, Inc. in March 1999. Operating profit for the third quarter grew by over 80 percent to $3.5 million from just under $2 million in the same period a year earlier.

Positive cash flow from operations totaled $3.2 million for the third quarter, compared with $800,000 for the same period in the previous year. This coupled to the conversion of $9 million of the Company's subordinated debentures to common stock, at a price of $9.50 per share, resulted in the reduction of the Company's long-term debt to $42.9 million from the $53.8 million that was reported at the conclusion of last quarter. This significant reduction in debt also improved the Company's debt to equity ratio to 2.7 to 1, versus the 5.5 to 1 at end of fiscal year 1999, which concluded on March 31, 1999. This leaves a remaining balance of $6 million in subordinated convertible debentures that carry an interest rate of 8.5 percent.

The most recent four trailing quarters of earnings before interest, taxes, depreciation, and amortization (EBITDA) improved to $15.3 million, from the $13.2 million reported at the conclusion of last quarter.

In the nine-month period that concluded on December 31, 1999, net income climbed 46.8 percent to a record $3.45 million, or $0.55 per diluted share, from $2.35 million, or $0.45 per diluted share, in the same period a year earlier. Sales rose 58 percent to $107.5 million in the most recent nine-month period from $68 million in the corresponding period a year earlier. Operating profit increased 67.1 percent to $8.37 million from $5 million in the year-earlier period.

John Sciuto, chairman, president, and chief executive officer of Comptek Research, Inc., said, "The Company's superior financial performance over the last four years is a direct reflection of our commitment to establishing Comptek as a company of prominence within its industry. This has been accomplished through a series of strategically selected acquisitions and a company-wide employee commitment to excellence. Comptek's reputation as a highly specialized provider of quality niche products and services is enhanced by the consistent delivery of Comptek's state-of-the-art technology based products."

Key Accomplishments Cited

Significant achievements during the third quarter included:

-- A subcontract valued at up to $7.7 million by the U.S. Navy to provide technical services to the U.S. Naval Warfare Systems Command in Charleston, SC.

-- Acquisition of the assets of Phase Two Industries, Inc., a private company in Santa Clara, CA, specializing in threat analysis and signal processing software for military applications.

-- Development of a "supercomputer class processing engine" enabling the electronic warfare simulator to generate real-time threats U.S. combat aircraft can expect to face in electronic battle situations.

Contract backlog as of December 31, 1999, was $165.9 million, up by 9.9% from $150.9 million at the end of 1998, although down from $178.3 reported as of October 1, 1999.

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