(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.

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.

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.

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…

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…

(Operator Instructions) Your first question comes from Tim Quillin – Stephens, Inc. Tim Quillin – Stephens, Inc.: Could you go over the backlog by segment?

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?

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?

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?

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.

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?

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.

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?

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?

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.

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?

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?

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?

I think it is.

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?

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?

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?

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?

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.

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?

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?

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.

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?

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.

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?

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?

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?

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?

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?

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?

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

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?

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?

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?

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.

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?

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?

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.

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.

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.

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?

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.

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.

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