# EDGAR Filing Document

**Accession Number:** 0000023197
**File Stem:** 0000023197-23-000020
**Filing Date:** 2023-3
**Character Count:** 30093
**Document Hash:** 7e06ed7e1374fca6210d4ec2c3144950
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000023197-23-000020.hdr.sgml**: 20230309

**ACCESSION NUMBER**: 0000023197-23-000020

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 36

**CONFORMED PERIOD OF REPORT**: 20230309

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230309

**DATE AS OF CHANGE**: 20230309

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COMTECH TELECOMMUNICATIONS CORP /DE/
- **CENTRAL INDEX KEY:** 0000023197
- **STANDARD INDUSTRIAL CLASSIFICATION:** RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
- **IRS NUMBER:** 112139466
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0731

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-07928
- **FILM NUMBER:** 23720214

**BUSINESS ADDRESS:**
- **STREET 1:** 68 SOUTH SERVICE ROAD
- **STREET 2:** SUITE 230
- **CITY:** MELVILLE
- **STATE:** NY
- **ZIP:** 11747
- **BUSINESS PHONE:** 6319627164

**MAIL ADDRESS:**
- **STREET 1:** 68 SOUTH SERVICE ROAD
- **STREET 2:** SUITE 230
- **CITY:** MELVILLE
- **STATE:** NY
- **ZIP:** 11747

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** COMTECH INC
- **DATE OF NAME CHANGE:** 19870503

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** COMTECH TELECOMMUNICATIONS CORP
- **DATE OF NAME CHANGE:** 19831215

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** COMTECH LABORATORIES INC
- **DATE OF NAME CHANGE:** 19780425

?xml version="1.0" ? cmtl-20230309

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549**

**FORM 8-K**<br>

**CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

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| | |
|:---|:---|
| **March 9, 2023** | **0-7928** |
| Date of Report <br>(Date of earliest event reported) | Commission File Number |

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![cmtl-20230309_g1.jpg](cmtl-20230309_g1.jpg)

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| **Delaware** | **11-2139466** |
| (State or other jurisdiction of <br>incorporation or organization) | (I.R.S. Employer Identification Number) |

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| |
|:---|
| **68 South Service Road, Suite 230**<br>**Melville, New York 11747** |
| (Address of Principal Executive Offices) (Zip Code) |
| **(631) 962-7000** |
| (Registrant's telephone number, including area code) |

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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| | | |
|:---|:---|:---|
| Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
| Common Stock, par value $0.10 per share | CMTL | Nasdaq Stock Market LLC |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Emerging growth company&nbsp;&nbsp;&nbsp;&nbsp;☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ![cmtl-20230309_g2.jpg](cmtl-20230309_g2.jpg)

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**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition.**

On March 9, 2023, Comtech Telecommunications Corp. (the "Company") issued a shareholder letter announcing its results of operations for its second quarter ended January 31, 2023 and guidance for its third quarter ending April 30, 2023.

A copy of the shareholder letter issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The information in this Item 2.02 (including the exhibit hereto) relating to this announcement shall not be deemed filed under the Securities and Exchange Commission's rules and regulations and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

**Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits.

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| | |
|:---|:---|
| <u>Exhibit Number</u> | <u>Description</u> |
| <u>[99.1](exhibit991_shareholderle.htm)</u> | <u>[Second](exhibit991_shareholderle.htm)[Quarter Fiscal Year 2023 Shareholder Letter, dated](exhibit991_shareholderle.htm)[March 9](exhibit991_shareholderle.htm)[, 202](exhibit991_shareholderle.htm)[3](exhibit991_shareholderle.htm)[(furnished and not filed herewith solely pursuant to Item 2.02).](exhibit991_shareholderle.htm)</u> |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |

---

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**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, Comtech Telecommunications Corp. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

COMTECH TELECOMMUNICATIONS CORP.

Dated:&nbsp;&nbsp;&nbsp;&nbsp;March 9, 2023

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Michael A. Bondi&nbsp;&nbsp;&nbsp;&nbsp;</u> 

Name:&nbsp;&nbsp;&nbsp;&nbsp;Michael A. Bondi

Title:&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Exhibit 99.1

![](exhibit991_shareholderle001.jpg)

SECOND QUARTER: Fiscal Year 2023 1

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![](exhibit991_shareholderle002.jpg)

SECOND QUARTER: Fiscal Year 2023 2 FOREWORD Ken Peterman, Chairman, President & CEO Fellow Shareholders, In my first letter to you as Comtech's CEO, I spoke of the enormous potential I saw at the company: our people, our spirit and history of innovation, and the opportunity to bring the company and our customers into a new era of communications convergence. In my second letter, I stated that I shared a keen sense of urgency with you as it related to execution: we needed to move faster than we ever had, as an organization, to adapt our operations and go-to-market strategy to a transforming market, and fast-evolving customer needs. And we needed to deliver the value created and captured by this heightened agility to you, our shareholders. Today, I am excited to report that the operational and cultural transformation that we call "One Comtech" has not only taken root but is delivering results. We have streamlined operations, improved collaboration, and accelerated innovation to ensure solutions are more rapidly deployed. Collaboration with our customers and each other has become the rule, as we implement shared tools and services across our enterprise, which we believe is improving efficiencies company-wide. The results of our transformation are evident in every aspect of our business, as well as with our customer engagements, and are being celebrated with the recent rebranding and launch of Comtech's new logo. This represents our next chapter as One We are delivering innovative communications solutions that empower people and set new ideas free.

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![](exhibit991_shareholderle003.jpg)

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![](exhibit991_shareholderle004.jpg)

SECOND QUARTER: Fiscal Year 2023 4 transformation of our global communications infrastructure, and the continually expanding appetite for always-on connectivity. Our results for the past two fiscal quarters demonstrate that the One Comtech approach to everything we do is delivering value to our customers, our people, and our shareholders: • Comtech grew revenue for the fifth consecutive quarter; • We once again recorded strong bookings, increasing forward revenue visibility as our funded backlog grew; • Importantly, we improved Adjusted EBITDA; • We publicly announced our first EVOKE technology partnership with Sirqul Inc.; and • Finally, as we detail in the outlook section, we expect revenue to grow sequentially between 1.0% and 3.0% and consolidated Adjusted EBITDA margins to be in the range of 8.5% to 10.0%. While the macroeconomic environment remains challenging, and we anticipate some variability in our operating performance from time to time, we believe the key trends that underpin our business remain healthy. Today, businesses, governments, and individuals around the world are demanding communications infrastructures with the capability to provide seamless connectivity all the time, in every environment and in every imaginable situation. As reported, the global demand for assured, ubiquitous connectivity is growing exponentially and the number of inter- connected devices is exploding. Satellite and terrestrial communications networks are already converging to assure Our results for the past two fiscal quarters demonstrate that the One Comtech approach to everything we do is delivering value to our customers, our people, and our shareholders.

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![](exhibit991_shareholderle005.jpg)

SECOND QUARTER: Fiscal Year 2023 5 uninterrupted connectivity, regardless of location or environment. Comtech's innovative technologies are delivering the solutions, capabilities, and services to meet the expanding demand for ubiquitous connectivity, and in so doing, play a major role in advancing the conditions necessary for digital equity around the world.

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![](exhibit991_shareholderle006.jpg)

SECOND QUARTER: Fiscal Year 2023 6 FISCAL Q2 2023 RESULTS CONSOLIDATED RESULTS $133.7 MM Revenues 34.3% Gross Margin $11.3 MM Adj. EBITDA $167.5 MM Bookings $702 MM OF FUNDED BACKLOG PROVIDES ADDED VISIBILITY TO FUTURE REVENUES.

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![](exhibit991_shareholderle007.jpg)

SECOND QUARTER: Fiscal Year 2023 7 CONSOLIDATED RESULTS ($ in millions) For Q2 fiscal 2023, we recorded $133.7 million of consolidated net sales, a 2.0% sequential increase over last quarter and our fifth consecutive quarterly increase. Compared to the year ago quarter, our consolidated Q2 fiscal 2023 net sales increased $13.3 million or 11.0%, reflecting higher net sales in both of our segments (see below). Q2 fiscal 2023 Adjusted EBITDA was $11.3 million, or 8.5% of consolidated net sales, as compared to $9.8 million, or 8.1% in Q2 fiscal 2022. The increase, both in dollars and as a percentage of sales, is primarily attributable to the increase in Q2 fiscal 2023 net sales, offset in part by a lower gross profit percentage, as discussed above. Sequentially, Adjusted EBITDA in Q2 fiscal 2023 was higher, both in dollars and as a percentage of sales, all while simultaneously investing in our One Comtech transformation. Consolidated bookings for the most recent quarter were $167.5 million, representing a 62.7% year-over- year increase and a quarterly book-to-bill ratio of 1.25x. Given our strong growth in bookings over the past several quarters, our funded backlog of $702.0 million is at a level not reported since July 2019. Also, funded backlog this past quarter was up 5.1% from Q1 fiscal 2023 and up 14.9% from Q2 fiscal 2022. 38.1% 38.2% 35.9% 35.7% 34.3% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Consolidated Gross Margin $120.4 $122.1 $127.0 $131.1 $133.7 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Consolidated Revenues $102.9 $113.4 $142.8 $181.2 $167.5 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Consolidated Net Bookings Gross margin in Q2 fiscal 2023 was 34.3%, as compared to 38.1% in Q2 fiscal 2022. Such change reflects more consolidated net sales reported in our Satellite and Space Communications segment, which historically achieved a lower gross profit margin than the solutions sold by our Terrestrial and Wireless segment (which generally has more software-based and recurring revenues). 8.1% 9.2% 10.0% 8.2% 8.5% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Consolidated Adjusted EBITDA Margins

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![](exhibit991_shareholderle008.jpg)

SECOND QUARTER: Fiscal Year 2023 8 SATELLITE & SPACE COMMUNICATIONS RESULTS Our Satellite and Space Communications segment designs, builds and supports a variety of sophisticated communications solutions that meet or exceed the highest standards for performance and quality by businesses and governments worldwide. It has four product areas: Satellite Modem and Amplifier Technologies, Troposcatter and SATCOM Solutions, Space Components and Antennas, and High- Power Amplifiers and Switches. $80.4 MM Revenues $8.2 MM Adj. EBITDA $137.5 MM Bookings

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![](exhibit991_shareholderle009.jpg)

SECOND QUARTER: Fiscal Year 2023 9 SATELLITE & SPACE COMMUNICATIONS RESULTS $69.2 $69.2 $76.8 $80.9 $80.4 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Satellite & Space Communications Revenues 3.2% 7.8% 10.2% 12.2% 10.2% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Satellite & Space Communications Adjusted EBITDA Margins $76.7 $85.6 $59.7 $135.8 $137.5 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Satellite & Space Communications Net Bookings Bookings in the Satellite and Space Communications segment totaled $137.5 million for the quarter. Key wins included a multi-million-dollar contract to deliver satellite communication technologies and terrestrial location-based services for end users of a large international satellite constellation network. __________________________________________ Q2 fiscal 2023 Adjusted EBITDA was $8.2 million, reflecting a change in product mix from Q1 fiscal 2023 (e.g., Q1 results included more next generation troposcatter solutions in support of the Ukrainian government). Also, Q2 fiscal 2023 Adjusted EBITDA represents a significant improvement from the $2.2 million of Adjusted EBITDA reported in Q2 fiscal 2022. This increase, both in dollars and as a percentage of related segment net sales, is primarily due to higher related segment net sales and lower selling, general and administrative and research and development expenses. Satellite and Space Communications revenues were $80.4 million for the quarter, comparable with Q1 fiscal 2023. Compared to the year ago quarter, Q2 fiscal 2023 Satellite and Space Communications revenues increased 16.2%, largely due to increased sales of our troposcatter and SATCOM solutions and satellite ground station technologies, partially offset by lower sales of our high reliability Electrical, Electronic and Electromechanical satellite-based space components.

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![](exhibit991_shareholderle010.jpg)

SECOND QUARTER: Fiscal Year 2023 10 TERRESTRIAL & WIRELESS NETWORKS RESULTS Our Terrestrial and Wireless Networks segment is a leading provider of the hardware, software, and solutions critical to the global 5G network infrastructure market, as well as for applications services requiring the specific location of a mobile user's geospatial position. It is organized into several product areas, including call delivery and call handling solutions, location-based and messaging solutions, and cyber security training & services. $53.3 MM Revenues $8.8 MM Adj. EBITDA $30.1 MM Bookings

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![](exhibit991_shareholderle011.jpg)

SECOND QUARTER: Fiscal Year 2023 11 TERRESTRIAL & WIRELESS NETWORKS RESULTS $51.2 $53.0 $50.2 $50.3 $53.3 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Terrestrial & Wireless Networks Revenues 23.2% 18.4% 12.9% 11.9% 16.5% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Terrestrial & Wireless Networks Adjusted EBITDA Margins $26.2 $27.8 $83.1 $45.4 $30.1 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Terrestrial & Wireless Networks Net Bookings Bookings in the Terrestrial and Wireless Networks segment totaled $30.1 million during the quarter. Key wins included a follow-on award from one of the largest mobile network operators in the United States to assist in moving its 5G mobile network to the Microsoft cloud. Q2 fiscal 2023 Adjusted EBITDA was $8.8 million, a $2.8 million or 46.7% increase from Q1 fiscal 2023, and a $3.1 million, or 26.1%, decline from Q2 fiscal 2022. As a percentage of net sales, Q2 fiscal 2023 Adjusted EBITDA was 16.5%, an increase from 11.9% in Q1 fiscal 2023, but lower than the 23.2% achieved in Q2 fiscal 2022. The decrease from the prior year period was due primarily to a lower gross profit percentage on higher related segment net sales and higher research and development expenses. Terrestrial and Wireless Networks revenues were $53.3 million for the quarter, a 6.0% sequential improvement over Q1 fiscal 2023. Compared to the year ago quarter, our Q2 Terrestrial and Wireless Networks revenues increased 4.1%, primarily reflecting higher sales of our NG-911 solutions and services, offset in part by lower sales of our trusted location and messaging solutions.

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![](exhibit991_shareholderle012.jpg)

SECOND QUARTER: Fiscal Year 2023 12 OUR GUIDANCE: FISCAL Q2 2023 Our long-term investors know that our sales cycles, given the nature of our customers, their procurement processes, and the complexity of our end markets, are somewhat unpredictable. This can introduce short-term performance variability from time to time. Nevertheless, we have good visibility into our forward revenues (which, in aggregate, currently stands at $1.1 billion) and the long-term operating performance benefits of our transformation to One Comtech remain intact. We remain intensely focused on managing the factors we can control, namely, our operations and our cost structure, and we believe that we are on the right course to deliver future margin expansion. For Q3 fiscal 2023, we expect: ● Net Sales: We expect our consolidated net sales to grow between 1.0% and 3.0% on a sequential basis. ● Adjusted EBITDA: We expect our consolidated Adjusted EBITDA margins to be in the range of 8.5% to 10.0%. In tandem with the above guidance, we are also encouraged by the progress that we have made related to our One Comtech transformation, our launch of EVOKE (our innovation foundry) and our emerging growth opportunities. Thus, the Board, together with management, adjusted the Company's capital allocation plans and determined to forgo a common stock dividend, thereby increasing our financial flexibility. We are encouraged by the initial results of our One Comtech transformation and believe that we are on the right course to deliver future margin expansion.

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![](exhibit991_shareholderle013.jpg)

SECOND QUARTER: Fiscal Year 2023 13 UPDATE: KEY BUSINESS INITIATIVES EVOKE: Comtech's Innovation Foundry Recently, we announced the launch of EVOKE, Comtech's innovation foundry. EVOKE extends the One Comtech philosophy to our customers, partners, and suppliers by bringing them together in a structure designed to foster collaboration and accelerate innovation in global connectivity infrastructure. We believe that not only will EVOKE enhance our existing technologies and service offerings (cloud native satellite ecosystems, 5G advanced services, and accelerating our migration to "as-a-service" business model), but will allow us to pioneer entirely new ideas and opportunities with the benefit of combining multiple perspectives, industry backgrounds, and areas of expertise. Our first publicly-announced partnership speaks directly to this spirit of innovation: we're working with Seattle-based tech pioneer Sirqul on what we call "Smart Operations," which will ultimately allow enterprises to leverage the real-time data provided by Internet of Things devices to develop actionable business and operations insights, and instantly respond to changing environmental and market dynamics. This has huge implications for everything from retail and office management to agriculture, heavy industry, logistics, education, and more. Looking ahead, you can expect to see Comtech foster partnerships with businesses from multiple sectors, but also with leading universities around the world to ensure we remain at the forefront of emerging technologies. We intend to match the rate of change we see transforming global communications EVOKE extends the One Comtech philosophy to our customers, partners, and suppliers.

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![](exhibit991_shareholderle014.jpg)

SECOND QUARTER: Fiscal Year 2023 14 by forging collaborative partnerships across industries and academia to ultimately create value for individuals, communities, governments, and businesses in a new era of connectivity. KEY CONTRACT WINS We are pleased with our strong bookings performance during the quarter, as it restored our funded backlog to a level not reported since July 2019. Among the orders awarded to us during the quarter, we received a multi-million-dollar contract to deliver satellite communication technologies and terrestrial location-based services for end users of a large international satellite constellation network. This strategic award illustrates the trust of our international partners in our technologies and further demonstrates the advantages of blending satellite and terrestrial based solutions and services to support the convergence of expanding global communications infrastructures. In addition, we saw key wins with the U.S. military, including multiple orders from the U.S. Army for VSAT equipment. Finally, in our Terrestrial & Wireless Networks segment, one of the largest mobile network operators in the United States contracted with us to assist in moving its 5G mobile network to the Microsoft cloud. INVESTOR MEETING We want to meet you! Comtech will be hosting an investor day on Wednesday, June 21st at our new state-of-the-art manufacturing facility in Chandler, Arizona. You will have an opportunity to hear directly from me and many of our key business leaders as we lay out, in detail, how Comtech intends to position itself at the heart of the convergence of satellite and terrestrial communications. Our technologies will ultimately provide on- the-move capabilities for end users of a large international satellite constellation network.

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![](exhibit991_shareholderle015.jpg)

SECOND QUARTER: Fiscal Year 2023 15 If you would like to receive a formal invitation, please contact Rob Samuels. IN CLOSING Over the past six months, Comtech's leadership and people have embraced and implemented an extraordinary change evident in not only the machinery of our operations, but our culture itself. Our topline financial results have responded, we have strengthened our existing long-term customer relationships, and at the same time won business with new customers as our opportunity set continues to expand. At the same time, and as I wrote in my introduction, we ultimately operate our business with the intention of delivering bottom line results. Expanding margins and increasing profits, particularly in an unpredictable economic environment, will give Comtech more and better options when it comes to investing in our people, our products, and our future. Our investors, partners and customers have our commitment that we will strive to make the decisions and changes necessary to ensure that Comtech, a company that boasts an over five- decade legacy of communications innovation, creates durable long-term shareholder value through innovation, strong leadership, and efficient capital allocation. As always, I thank you for your engagement and continued support. Ken Over the past six months, we have embraced and implemented extraordinary change.

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![](exhibit991_shareholderle016.jpg)

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