Comarco Wins Army Contract Formerly Held by Ultrasystems

Capping a year of spectacular growth, Comarco Inc. said Tuesday that it has won a new U.S. Army contract worth a potential $27 million over the next 56 months. The award is the second-largest ever received by the Anaheim defense contractor, which took the contract away from the incumbent supplier, Ultrasystems Inc. of Irvine, in a competition based on price and performance.

Ultrasystems had held the contract for the last five years.

The contract, which has an initial eight-month period and four one-year optional renewals, calls for Comarco to help the Army and its suppliers test electronic communications systems at the Electronics Proving Ground at Ft. Huachuca, Ariz.

For the initial period of the contract, the company will be paid $3.3 million. The remainder will be paid only if the contract is renewed each year.

With the full value of the contract counted, Comarco’s backlog of orders now stands at $137 million.

In addition, Glenn Buell, Comarco’s chairman and chief executive, said the contract has the potential of expanding the company’s avenues of business.

“This award will expand our high-technology expertise in the rapidly growing computer test business area. Strong performance under the contract will open other doors for Comarco,” he said.

For the first nine months of its fiscal year ended Oct. 31, the fast-growing defense contractor had sales of $58.9 million, more than double the $24.6 million posted the year before. Profits were $1.7 million, a 21% increase from the year-ago figure of $1.4 million.

Since the beginning of 1987, the company’s stock price has increased about 50% from an $8.25 close on Dec. 31 to a close of $12.25 Tuesday, up $1.25 for the day. Company officials attributed the rapid rise after a year of stagnation to recent “buy” recommendations from two local brokerage houses.