Core Viewpoint - Block & Leviton is investigating Comtech Telecommunications Corp. for potential securities law violations following a delay in the company's financial results and concerns over aggressive accounting practices [1][2][4]. Group 1: Investigation Details - The investigation is focused on Comtech's use of aggressive accounting procedures, including "unbridled receivables" [2]. - Block & Leviton is looking into whether the company committed securities law violations and may file an action to recover losses for affected investors [4]. Group 2: Investor Information - Investors who have lost money on their Comtech investments are encouraged to contact Block & Leviton to explore recovery options [1][5]. - Eligibility for recovery includes anyone who purchased Comtech common stock and experienced a decline in share value, regardless of whether they sold their investment [3]. Group 3: Whistleblower Program - Individuals with non-public information about Comtech are encouraged to assist in the investigation or report to the SEC under the whistleblower program, which offers rewards of up to 30% of any successful recovery [6]. Group 4: Firm Background - Block & Leviton is recognized as a leading securities class action firm, having recovered billions for defrauded investors through litigation in federal courts [9].

Core Insights - Comtech Telecommunications Corp. has faced significant financial challenges and leadership changes, raising concerns about its future prospects and financial health [1][3][5]. Group 1: Financial Performance and Concerns - The implementation of the "One Comtech" strategy under CEO Ken Peterman initially resulted in five consecutive quarters of revenue growth, but issues began to surface in December 2023 [2]. - The earnings report for the quarter ending October 31, 2023, raised a "going concern" flag, indicating doubts about the company's ability to meet financial obligations, with most of its credit line depleted and struggles to renew it before October 2024 [3]. - Analysts have raised concerns regarding Comtech's use of "unbilled receivables," which is seen as aggressive accounting, contributing to a 29% drop in stock price on December 8, 2023 [4]. Group 2: Leadership Changes and Stock Performance - In March 2024, the board of directors terminated CEO Ken Peterman, claiming the decision was unrelated to business strategy or financial performance, though investor skepticism remains [5]. - Comtech announced a delay in filing its quarterly financial statements with the SEC on March 13, 2024, leading to a 27% decline in stock price on the same day [6]. - Under interim leadership, the release of second-quarter financial results on March 18, 2024, showed significant shortfalls compared to analyst expectations, causing a further stock price drop of up to 32% on March 19, 2024 [7]. Group 3: Investigations and Future Outlook - The recent developments have prompted an investigation by Hagens Berman into potential securities violations, particularly focusing on the company's accounting practices [7][8]. - Hagens Berman is particularly interested in examining the use of unbilled receivables to assess whether these practices accurately reflect Comtech's financial health [8].

Core Insights - Comtech Telecommunications (CMTL) has secured a significant contract for Massachusetts' Next Generation 911 (NG911) system, valued at over $250 million, with an initial term of five years from August 1, 2024, to July 31, 2029, and an option to extend for another five years [1][2] Group 1: Contract and Business Operations - The contract highlights Massachusetts' trust in CMTL for ensuring secure public communication through its IP-based NG911 system, which processes urgent service requests from public networks [2] - CMTL has been involved with Massachusetts since 2014, providing essential services for emergency communications [2] Group 2: Company Profile and Market Position - CMTL is based in Huntington, NY, and is a leading global provider of terrestrial and wireless network solutions, including next-generation 911 emergency services, satellite communications, and cloud-native capabilities [3] - The company has diversified its operations across various sectors, including broadcast, enterprise, space, telecom, maritime, public safety, and military [3] Group 3: Recent Collaborations and Financial Performance - In early 2024, CMTL partnered with Eutelsat OneWeb to deliver Low Earth Orbit (LEO) satellite connectivity services to Antarctica, enhancing its service offerings [4] - CMTL also worked with the Arizona Department of Administration to transition the state's 911 system to its updated NG911 infrastructure [5] - In the last reported quarter, CMTL experienced a loss of 15 cents per share, missing estimates by 153.57%, while revenues increased by approximately 0.4% year over year to $134 million, falling short of consensus estimates by 12.18% [5]

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Comtech Telecommunications (CMTL) came out with a quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of $0.28. This compares to loss of $0.23 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -153.57%. A quarter ago, it was expected that this communications company would post earnings of $0.26 per share when it actually produced earnings of $0.24, delivering a surprise of -7.69%.Over the last four quarters, th ...

Financial Data and Key Metrics Changes - Consolidated net sales increased slightly year-over-year to $134.2 million compared to $133.7 million in the second quarter of fiscal 2023 [16] - Gross margin was 32.2% compared to 31.5% in the first quarter of fiscal 2024 [29] - Adjusted EBITDA was $15.1 million, reflecting a 33% increase year-over-year, achieving an 11% adjusted EBITDA margin [16][31] Business Line Data and Key Metrics Changes - Satellite and Space Communications segment saw net sales affected by delays in order receipt and performance, primarily due to challenging business conditions [24] - Terrestrial and Wireless Networks segment reported higher net sales from NG-911 and call handling services, with a book-to-bill ratio of 1.33 times [28] Market Data and Key Metrics Changes - Backlog reached $680 million, indicating strong demand for products [18] - Visible revenue stands at approximately $1.6 billion, providing a solid foundation for future growth [20][32] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet through refinancing efforts, which is a top priority [8][36] - Comtech is committed to a significant transformation aimed at driving growth and improving profitability [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging business conditions but expects net sales and adjusted EBITDA for fiscal 2024 to be better than fiscal 2023 [32] - Confidence in winning back ground lost during the first half of the fiscal year due to healthy overall demand for products [18] Other Important Information - The company completed the sale of PST in early November 2023, impacting financial performance [17][25] - Strategic investments from major shareholders totaling $45 million were secured to support the company's transformation [14] Q&A Session Summary Question: What are the expectations regarding the refinancing efforts? - Management expressed confidence in resolving refinancing efforts as a top priority despite recent interruptions [33] Question: How does the company view its market position and future growth? - Management highlighted strong demand and a solid backlog, indicating optimism for future growth opportunities [20][32]

Financial Performance - Consolidated net sales for Q2 fiscal 2024 were $134.2 million, down from $151.9 million in Q1 fiscal 2024 and $143.9 million in Q2 fiscal 2023[194]. - In Q2 fiscal 2024, consolidated net sales were $134.2 million, a slight increase of $0.5 million or 0.4% compared to $133.7 million in Q2 fiscal 2023[204]. - Consolidated net sales increased by $21.2 million, or 8.0%, to $286.1 million for the six months ended January 31, 2024, compared to $264.9 million for the same period in 2023[246]. - Net sales in the Satellite and Space Communications segment rose by $19.7 million, or 12.2%, to $181.0 million for the six months ended January 31, 2024[247]. - The Terrestrial and Wireless Networks segment reported net sales of $105.1 million, an increase of $1.5 million, or 1.4%, compared to $103.6 million for the same period in 2023[249]. - The Satellite and Space Communications segment accounted for 63.3% of consolidated net sales for the six months ended January 31, 2024, up from 60.9% in the same period of 2023[247]. Profitability Metrics - Gross margin improved to 32.2% in Q2 fiscal 2024, compared to 31.5% in Q1 fiscal 2024 but decreased from 34.3% in Q2 fiscal 2023[194]. - Gross profit for Q2 fiscal 2024 was $43.2 million, representing 32.2% of consolidated net sales, down from 34.3% in Q2 fiscal 2023[213]. - The gross profit for the six months ended January 31, 2024, was $91.1 million, a decrease of $1.6 million from $92.7 million in the same period of 2023, with a gross profit margin of 31.8% compared to 35.0%[255]. - Adjusted EBITDA for the three months ended January 31, 2024 was $15.1 million (11.3% of net sales), compared to $15.1 million (11.3%) in the same period of 2023[238]. - Adjusted EBITDA for the six months ended January 31, 2024, was $33.5 million, reflecting an increase from $18.1 million in 2023, with a percentage of related net sales rising from 11.7% to 12.3%[279]. Operating Income and Loss - GAAP operating income was $3.0 million in Q2 fiscal 2024, up from $2.1 million in Q1 fiscal 2024 and a loss of $0.8 million in Q2 fiscal 2023[194]. - Operating income for the three months ended January 31, 2024 was $3.0 million, compared to an operating loss of $0.8 million in the same period of 2023[226]. - The company recorded a net loss attributable to common stockholders of $33.8 million for the six months ended January 31, 2024, compared to a loss of $19.3 million in the same period of 2023[278]. - Net loss attributable to common stockholders increased to $30.5 million for the three months ended January 31, 2024, compared to $6.5 million in 2023, influenced by $17.9 million in charges related to stock exchange[236]. Cash Flow and Liquidity - Operating cash activities resulted in an outflow of $26.7 million, primarily due to the reduction of accounts payable[194]. - Net cash used in operating activities was $41.2 million for the six months ended January 31, 2024, compared to $16.8 million for the same period in 2023[285]. - Cash and cash equivalents increased to $40.0 million as of January 31, 2024, compared to $19.0 million on July 31, 2023[283]. - The company reported a net cash provided by financing activities of $37.3 million for the six months ended January 31, 2024, compared to $26.6 million in the same period of 2023[285]. - The company has a Credit Facility with borrowings of $166.2 million as of the issuance date, with $136.8 million related to the Revolving Loan Facility[287]. Expenses - Selling, general and administrative expenses increased to $30.3 million (22.6% of net sales) for the three months ended January 31, 2024, compared to $27.4 million (21.6%) in the same period of 2023[218]. - Selling, general and administrative expenses were $63.0 million for the six months ended January 31, 2024, maintaining 22.0% of consolidated net sales, consistent with the same period in 2023[260]. - Research and development expenses decreased to $6.8 million (5.1% of net sales) for the three months ended January 31, 2024, down from $12.4 million (9.3%) in 2023[221]. - Research and development expenses decreased by $10.5 million, or 41.8%, to $14.7 million for the six months ended January 31, 2024, representing 5.1% of consolidated net sales[262]. Contracts and Bookings - New bookings totaled $141.8 million, resulting in a book-to-bill ratio of 1.1, driven by a $48.0 million contract extension for NG-911 with the State of Washington[194]. - The company was awarded a multi-year contract by the U.S. Army with a total potential value of $544.0 million, expected to contribute significantly to net sales in late fiscal 2024[195]. - The Terrestrial and Wireless Networks segment extended NG-911 services in Washington valued at $48.0 million over five years, with an option to extend through 2034[196]. - The book-to-bill ratio for the Satellite and Space Communications segment was 0.86x, while the Terrestrial and Wireless Networks segment had a ratio of 1.33x for Q2 fiscal 2024[206][208]. - The book-to-bill ratio for the Satellite and Space Communications segment was 1.13x for the six months ended January 31, 2024[247]. Restructuring and Strategic Initiatives - The company incurred $2.7 million in restructuring costs during the three months ended January 31, 2024, aimed at streamlining operations[219]. - For the six months ended January 31, 2024, the company incurred $6.4 million in restructuring costs, compared to $2.9 million in the same period of 2023, primarily to streamline operations and improve efficiency[261]. - The company plans to engage financial advisors to discuss refinancing options for the Credit Facility and restructuring the Series B Convertible Preferred Stock[289]. - The company plans to refinance its Credit Facility and secure new sources of credit or outside capital while implementing cost savings and restructuring activities to reduce cash used in operations[291]. Tax and Interest - The effective tax rate for the three months ended January 31, 2024 was (52.0)%, a significant change from 11.0% in 2023, due to changes in expected product and geographic mix[232]. - The effective tax rate for the six months ended January 31, 2024, was (52.0)%, a significant change from 11.0% in the prior year, primarily due to changes in expected product and geographic mix[274]. - Interest expense rose to $5.3 million for the three months ended January 31, 2024, up from $3.8 million in 2023, primarily due to higher average debt and interest rates[230]. - Interest expense increased to $10.2 million for the six months ended January 31, 2024, from $6.0 million in the prior year, due to a higher average debt balance and rising interest rates[272]. Divestitures and Investments - The company completed the divestiture of its solid-state microwave high power amplifiers product line, applying $16.2 million of proceeds to repay debt[201]. - The estimated gain on the PST Divestiture was $2.2 million, recorded in the second quarter of fiscal 2024, with no similar gain in the prior year[266]. - The company has made significant capital expenditures for new high-volume manufacturing centers and cloud-based computer networks, with continued investments expected in fiscal 2024[293]. - The company filed a $200 million shelf registration statement with the SEC for the sale of various types of securities, including debt securities, effective until July 25, 2025[295]. - The company has a $100 million stock repurchase program authorized by the Board of Directors, with no repurchases made during the six months ended January 31, 2024[296].

Financial Performance - Consolidated net sales for Q2 fiscal 2024 were $134.2 million, a slight increase of $0.5 million or 0.4% year-over-year, but a decline from $151.9 million in Q1 fiscal 2024[15] - Adjusted EBITDA for Q2 fiscal 2024 was $15.1 million, representing an 11.3% margin, compared to $18.4 million (12.1% margin) in Q1 fiscal 2024 and $11.3 million (8.5% margin) in Q2 fiscal 2023, reflecting a 33% increase year-over-year[16][37] - GAAP operating income for Q2 fiscal 2024 was $3.0 million, an improvement from $2.1 million in Q1 fiscal 2024 and a loss of $0.8 million in Q2 fiscal 2023, marking the third consecutive quarter of GAAP operating income[20][35] - The company reported a net loss of $10.558 million for the three months ended January 31, 2024, compared to a net loss of $4.805 million in the same period of 2023[90] - For the fiscal year 2023, the company reported a GAAP net loss of $(14,660,000) and a net loss per diluted share of $(1.21)[97] Sales and Bookings - Total net bookings for Q2 fiscal 2024 were $141.8 million, resulting in a book-to-bill ratio of 1.06x[40] - The company secured a multi-year Global Field Service Representative contract with the U.S. Army, valued at $544 million, which is expected to contribute significantly to net sales in fiscal 2024[24] - Net bookings in the Terrestrial and Wireless Networks segment reached $74.2 million, including a $48.0 million extension for NG-911 services for the State of Washington[67] - Net bookings in the Satellite and Space Communications segment totaled $67.6 million for the quarter, including over $7.0 million from two foreign militaries for next-generation troposcatter solutions[54] Segment Performance - The Terrestrial and Wireless Networks segment achieved 12% sequential growth and 4% growth compared to Q2 fiscal 2023, driven by performance on NG-911 contracts[16] - Terrestrial and Wireless Networks segment net sales were $55.6 million for Q2 FY24, an increase of 12.3% from Q1 FY24 and 4.3% from Q2 FY23[65] - Operating income for the Terrestrial and Wireless Networks segment in Q2 FY24 was $8.1 million, or 14.6% of segment net sales, compared to $3.3 million or 6.2% in Q2 FY23[66] - Satellite and Space Communications segment net sales were $78.6 million for Q2 FY24, a decrease of $1.8 million compared to Q2 FY23, primarily due to lower sales from the PST divestiture and satellite ground station solutions[52] - Operating income for the Satellite and Space Communications segment in Q2 FY24 was $1.9 million, representing 2.4% of segment net sales, down from $3.3 million or 4.1% in Q2 FY23[53] Margins and Profitability - The company reported a gross margin of 32.2% in Q2 fiscal 2024, compared to 34.3% in Q2 fiscal 2023[15] - Adjusted EBITDA for the Satellite and Space Communications segment was $7.1 million in Q2 FY24, a decrease from $8.2 million in Q2 FY23[53] - Adjusted EBITDA for the Terrestrial and Wireless Networks segment improved to $13.7 million in Q2 FY24 from $8.8 million in Q2 FY23[66] - Gross profit decreased to $43.198 million for the three months ended January 31, 2024, down 5.93% from $45.924 million in the same period of 2023[90] Assets and Liabilities - Total current assets increased to $343.245 million as of January 31, 2024, compared to $305.486 million as of July 31, 2023[92] - Total liabilities decreased to $423.301 million as of January 31, 2024, down from $445.727 million as of July 31, 2023[92] - The company’s cash and cash equivalents increased to $39.956 million as of January 31, 2024, compared to $18.961 million as of July 31, 2023[92] Strategic Initiatives - The relocation of the corporate headquarters to Chandler, Arizona, aims to streamline operations and improve efficiency, supporting the One Comtech transformation[77] - The company is targeting net sales and Adjusted EBITDA for fiscal year 2024 to exceed fiscal 2023 levels despite challenging business conditions[71] Research and Development - Research and development expenses significantly decreased to $6.843 million, down 45% from $12.441 million year-over-year[90] Shareholder Information - The weighted average number of common shares outstanding for the three months ended January 31, 2024, was 28.662 million, compared to 27.954 million in the same period of 2023[90] - The weighted average diluted shares outstanding for the six months ended January 31, 2024, was 28,958,000[97]

CHANDLER, Ariz.--(BUSINESS WIRE)--March 18, 2024-- Comtech (NASDAQ: CMTL) (“the Company”) today announced its second quarter fiscal 2024 financial results in a letter to shareholders, which has been posted to the Investor Relations section of Comtech's website. Investors are invited to access the second quarter fiscal 2024 shareholder letter at comtech.com/investors/. A copy of the letter will also be filed with the Securities and Exchange Commission in a Form 8-K. Comtech will host its previously schedul ...

MELVILLE, N.Y.--(BUSINESS WIRE)--March 13, 2024-- Comtech (NASDAQ: CMTL) today announced that it plans to release its second quarter fiscal 2024 results after the market closes on Monday, March 18, 2024. At 5:00 p.m. ET that day, the Company will hold a conference call to discuss its second quarter fiscal 2024 results, operations, and business trends. A webcast of the call will be available to the public at the investor relations section of the Comtech web site at www.comtech.com. Alternatively, investors ...