Ladies and gentlemen, thank you for standing by. Welcome to Comtech Telecommunications Corp.'s First Quarter Fiscal 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, December 10, 2013. I would now like to turn the conference over to Ms. Maria Salerno of Comtech Telecommunications. Please go ahead, ma'am.

Thank you, and good morning. Welcome to the Comtech Telecommunications Corp. conference call for the first quarter of fiscal year 2014. 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; and Rob Rouse, Senior Vice President, Strategy and M&A. 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, objectives and business outlook; the plans, objectives and business outlook of the company's management. The company's assumptions regarding such performance, business outlook and plans are forward-looking in nature and involve certain significant risks 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 and Exchange Commission filings. I am pleased now to introduce the President and Chief Executive Officer of Comtech, Fred Kornberg. Fred?

Thanks, Maria. Good morning, everyone, and thank you for joining us on this call. As we announced yesterday afternoon, we reported the first quarter fiscal 2014 results of $83.4 million in revenues, a GAAP diluted EPS of $0.28 and adjusted EBITDA for the first quarter of $14.3 million. The signs of stabilization that we observed in certain of our end markets during the last quarter of fiscal 2013 continued throughout the first quarter of fiscal 2014. We're very pleased with our first quarter results, and we believe that certain of our end markets may be actually improving. At this point, although we're still navigating through a challenging global economy with strong headwinds from the U.S. government funding pressures, the signs of stabilization and improvement are encouraging. With this in mind, we have updated our and increased our fiscal 2014 guidance. We now believe that revenues in fiscal 2014 will be in the range of $325 million to $345 million. GAAP diluted EPS will be in the range of $1.12 to $1.25, and our adjusted EBITDA is expected to be in the range of $55 million to $59 million. In light of both our short- and long-term growth expectations, our Board of Directors yesterday increased our annual target dividend from $1.10 per common share to $1.20 per common share, and also approved a dividend for the second quarter of fiscal 2014 of $0.30 per common share. This dividend, which will be our 14th consecutive quarterly dividend, is expected to be paid on February 19, 2014 to stockholders of record on January 17, 2014. To date and since the inception of our dividend program, we have paid out approximately $71 million of dividends and continue to believe our dividend program is an excellent way to return capital to our stockholders. During the first quarter of fiscal 2014, we also repurchased approximately 125,000 shares of our common stock at an aggregate cost of $3.6 million pursuant to our board authorized $50 million stock repurchase program. From inception to date, we have repurchased approximately $380 million under our stock repurchase program. And, yesterday, our board authorized another increase to our current stock repurchase program from $50 million to $100 million. We currently have approximately $71 million available for repurchases pursuant to this increased authorization. At this point, let me turn it over to Mike Porcelain to provide a brief overview of our first quarter financial results, and then I will return and talk more specifically about each of our 3 business segments. Mike?

Thanks, Fred, and good morning, everyone. I'll walk you through the Q1 results and provide some commentary on our updated fiscal 2014 business outlook. During Q1, we generated revenues of $83.4 million, of which 25.6% were for U.S. government end users, 57% were for international end users, with the remainder being for domestic commercial end customers. Excluding sales on our Mobile Data Communications segment, Q1 2014 sales to the U.S. government comprised only 20.6% of the combined Telecommunications Transmission and RF Microwave Amplifier segment sales. Net sales in our Telecom Transmission segment were $54.4 million in Q1 of fiscal 2014 as compared to $53.3 million we achieved in Q1 of last year, representing an increase of 2.1%. This increase reflects higher sales in our over-the-horizon microwave system product line, which were partially offset by slightly lower sales of our Satellite Earth Station products. During Q1 of fiscal 2014, sales of our Satellite Earth Station products were slightly lower primarily due to lower sales to U.S. government customers. Despite the impact of the partial U.S. government shutdown that occurred during the first quarter of fiscal 2014, our book-to-bill ratio for the quarter in this product line was slightly over 1.0. Based on our assessment that end market conditions for this product line have stabilized and may be improving, we expect bookings in sales on this product line in fiscal 2014 to be slightly higher than the level we achieved in fiscal 2013. Sales of our over-the-horizon microwave systems in Q1 include sales related to our performance on both our 3-year $58.6 million contract and our 4-year $57.4 million contract to design and supply over-the-horizon microwave systems and equipment for use in a North African government's communications network. Based on our expected performance on both of these contracts and other contracts currently…

Thanks, Mike. Thank you very much. At this point, I'd like to discuss some of the recent developments in each of our 3 business segments, which should add some color as to why we continue to be optimistic about fiscal 2014 and beyond. Our largest segment remains our Telecommunications Transmission segment. Within this segment, the majority of our revenues have been and are expected to continue to be from our Satellite Earth Station product line. Our strong leadership position and market share in the Satellite Earth Station area is driven by our proven ability to deliver the most bandwidth-efficient modems to our end customers. As you know, we have a long track record of being the innovation leader in this space. A few years ago, we introduced our patented Carrier-in-Carrier technology, which allows our modems to use the same bandwidth both to transmit and receive satellite channels simultaneously thereby, essentially doubling bandwidth efficiency. Unfortunately the introduction of this groundbreaking technology coincided with the onset of the economic downturn and therefore, muted the potential sales that we believe could have been realized in a much more favorable economic environment. We believe although this technology has been in the marketplace for a few years, that this technology has a long way to go as the economy rebounds and government spending returns to normal. In 2012, we also introduced the new line of products called advanced VSAT. These products combine a variety of technologies within our IP portfolio, among others, which include advanced Forward Error Correction, advanced coding modulation and our managed bandwidth technology to provide integrated solutions. By listening closely to our end customers, we have been able to offer our advanced VSAT solutions into markets that have traditionally been served primarily by TDMA solutions. The good news is that, recently, we…

[Operator Instructions] We'll take our first question from Mark Jordan with Noble Financial.

First question for Mike. Could you comment as to how you think the spring will play out with regards to your converts? And what strategies do you think you might deploy with regards to, I assume taking them off the street one way or the other?

Sure. I think a couple of things are outside of our control. The stock price is going to move in the direction that we all hope will be positive for the shareholders. And given the current trend, it's likely that the bondholders would exercise their conversion option. So thus sitting here today that scenario is certainly much more plausible than it was, 6, 7 or 8 months ago. The board did authorized a contingent stock buyback program doubling our current authorization to $100 million, which is something that we're not kind of progress along and we kind of take a wait-and-see. But really, it's outside of our control given the stock price and if the stock prices where it is today, they will likely convert and then with the kind of we take a look at what we're going to do with that cash in May.

Okay. Second question, look back a few years ago when there was a competition for rebuilding some of the TRC-170s, other people tried to compete with you in the tropo marketplace. Have you seen any competitive efforts out in the marketplace by some of the other people who had at least historically played in the tropo sector? What seems to be an emerging market here with both DoD going to small form factor tropo hardware and also seemingly building a pipeline in the international marketplace.

Yes, Mark, I think the answer to your question really is, as far as the competition is concerned, we see that periodically, there are some thrusts into this area. I think we're well-positioned as I tried to mention in the speech that the army has really has settled on our design because it is backwards compatible with the TRC-170 systems. Now the TRC-170 systems are the only systems out there in use by the Army for the last few years. Very recently, we have -- we've provided, with a partner, the snap terminal tropo as we call it, which is equivalent to the snap satellite terminal. I think the Army is beginning to settle on that particular system as the highly mobile type of system as compared with the TRC-170 system. So I think we're well-positioned in both areas and both the snap terminals and the TRC-170s, which we've modified without modems talk to each other and are backward compatible. So I think our position, I think is pretty strong. The competition is not going to go away. They will continue trying and we hope to capture most of the business.

Okay. Final question relative to the operating margins on mobile data. Do you see that as a sustainable level or what we know it just very high at 40-plus -- 46% is there -- were there any one-time events in there that inflated that margin?

We did, during our Q1 quarter, we had announced it in our 10-K. We did have a one-time sort of a high-margin sale of some of our SENS products and our technology to one of our customers. But it is fair to assume that right now that our operating margins will be a little bit over 40% operating margin in that segment. But it will not be at the level that it was in Q1.

[Operator Instructions] We'll go next to Tyler Hojo with Sidoti & Company. Tyler Hojo - Sidoti & Company, LLC: Just firstly, Mike, if you could just provide the backlog by segment?

Sure, Todd. In our Telecom Transmission, we had $132.5 million in backlog. Our RF Amplifiers backlog at $40.6 million, which did not include that $7 million WIN-T order that we just announced. And $9.7 million in our Mobile Data Communications segment for a total of $182.8 million in backlog. Tyler Hojo - Sidoti & Company, LLC: Okay. And, I'm sorry if I missed it, but I don't have it for Q4 or the fiscal '13, would you be able to provide the backlog by segment for that as well?

Sure. In our Telecom Transmission segment, we did -- we had $133.4 million; RF Amplifiers, we had $40.7 million; and our Mobile Data had $15.6 million, which should add up to $189.7 million. Tyler Hojo - Sidoti & Company, LLC: Okay. Wonderful. And just maybe moving onto the Satellite Earth Station product line, I'm just curious if maybe you could anecdotally speak about how far that business is off from the peak? And I guess, in the script you mentioned that additional R&D investments were likely. I'm just curious, if you can get back to those peak levels just based on the current product line that's out there today?

Sure. From a comparative basis, it's fair to say on a quarterly basis from our peak, we're probably lower in quarterly revenue by about 35% from where our peak was and that was sort of around 2008 right after we had purchased Radyne. So do we think we can get back there? At some point, I think we do. We've historically looked at this market size being a growth of excess -- of 10% a year, when we bought Radyne as talked about that it was difficult to figure out what was taking away market share versus what was the growth of the market. But we do think that this market has a long-term growth rate of, say 10%. Are we going to get back there right now given the economy? Probably not this year. So we would be very happy with the market just growing a couple of points and that's sort of way we're looking at. How fast we can get back to a higher growth rate is going to be dependent upon the macro and the global economy. And in particular, we're still being sort of suppressed by the budget issues in the U.S. government and that needs to open up and we do think eventually that, that will.

I also think, Tyler, that if you look at the market broadly, 4, 5 years ago, TDMA market was kind of nipping at our ankles and that tables have kind of turned there. We felt the impact of that, but now the tide is turning, as Fred mentioned in his comments, where we believe there are opportunities in markets traditionally served by TDMA where we think we have better technology. So in addition to Mike's comment about the overall market growth, that's a market that where we're kind of entering for the first time that also has good growth dynamics. Tyler Hojo - Sidoti & Company, LLC: Okay, great. And maybe just lastly, this ATIP contract certainly seems like an exciting kind of new start for you all. Just curious what the timeframe is in terms of develop and -- development and when we might see the program move into production?

We're anticipating, Tyler, before the end of this fiscal year to be done with the development part. We believe that it should move fairly quickly into the production part given the fact that the customer really needs the product. But I think the right way to think about that is by the end of this fiscal year we'll be done with development and hopefully receive some type of production contract before the end of the year or beginning of next year. Tyler Hojo - Sidoti & Company, LLC: So the $29 million is predominantly development, is that the right way to think about it?

No, most of the $29 million is going to be production. I believe, it might be it's around $9 million or so that's the development.

Tyler, we'll probably do somewhere between $8 million and $9 million of developmental work this year, with the remaining $20 million just from the U.S. Navy will be hardware orders. And so how that flows out in '15 versus '14, even if you just assume it's another -- '15 is $8 million of hardware, we don't know. It could be the $20 million we get in '15. But really where that's going to benefit that at the same revenue is on the margin line because the hardware will be in a much higher profitable margin than the cost-plus the development work that we're doing today. So that's where we're excited about as we look forward, we feel very confident on our production capabilities and development capabilities. So we see a big margin change looking -- going forward once we receive hardware orders.

[Operator Instructions] And it appears they have no further questions at this time. I'd like to turn it back over to the company for any closing remarks.

Okay. Thank you very much. I guess, thanks for everybody for joining us today and we look forward to speaking with you again in March. Thank you very much.

This does conclude today's conference. You may now disconnect and have a wonderful day.