Comtech Announces Financial Results for Fourth Quarter and Fiscal Year 2026
Annual operating cash flow turned positive, while the planned business sale remains subject to closing conditions and regulatory approvals.
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Sixth Consecutive Quarter of Consolidated Positive Operating Cash Flow Contributes to Rise in Consolidated Year-End Liquidity to
Fiscal 2026 Adjusted EBITDA from Continuing Operations Increases
Enhanced Financial Flexibility Resulting from Improved Creditor and Preferred Stockholder Terms with Additional Improvements Pending Anticipated Closing of Sale of Most of S&S Business
Poised to Capitalize on Dedicated Focus on Extending Allerium’s Leadership in Mission Critical Public Safety and Communications Technologies
Ken Traub, Chairman, President and CEO, stated:
“Our accomplishments in Fiscal 2026 highlight the successful execution of the transformation plan we announced when I took over as CEO during Fiscal 2025. Comtech is now a far stronger company operationally, financially, organizationally and strategically.
We generated positive consolidated operating cash flows for each of the last six quarters, with Fiscal 2026 generating
Our significantly improved operating and financial performance put us in a position of strength as we focused on two other major objectives for the year – executing on the strategic alternatives process and improving our capital structure.
We conducted a broad review of strategic alternatives and determined that the best path was to divest the majority of the Satellite and Space Communications (“S&S”) business and retain its cyber security training services and related businesses, so that we can dedicate our focus and attention on building upon Allerium's leadership position in public safety. We concluded that process in June with what we believe is an excellent outcome, a definitive agreement to sell most of the S&S business to an affiliate of Gilat Satellite Networks Ltd for
As a result of our improved performance, as well as the successful outcome of the strategic alternatives process, we were able to enter into favorable amendments to our senior debt, subordinated debt and preferred stock agreements contemporaneously with signing the definitive agreement with Gilat. These amendments provide the Company enhanced financial flexibility and a lower expected cost of capital. We are looking forward to additional refinancings following the anticipated closing of the sale of most of S&S, which we expect will further enhance our financial flexibility and reduce our cost of capital.
We are excited that the anticipated closing of this transaction will enable us to create a focused and dedicated business centered around Allerium's leadership position in mission critical public safety and communications technologies and our proprietary cyber security training services. This is a business that not only has an attractive financial profile with long-term customer relationships, recurring revenue and healthy backlog, but has significant opportunities for growth driven by our recent innovations, cross-selling and increasing market demands for our current and evolving offerings.
Our successful transformation has inspired a revived culture of confidence within our Company. Our employees are proud of how far we have come and are excited about the future ahead.
I would like to thank all of our employees for their dedication and loyalty as we have been successfully navigating the transformation and the current transition. In particular, I would like to recognize Mike Bondi, our Chief Financial Officer, and Don Walther, our Chief Legal Officer, who have both been instrumental in this transformation, and as we announced separately today, will be departing after a brief transition period that they are helping to lead. I would also like to welcome Rich Nyren and Amy Rothstein-Hovey who both recently joined and will not only succeed to the CFO and CLO positions, but will be more tightly integrated into the remaining Allerium operation as we build a more strategically aligned, built-for-purpose operation for the future.”
Jeff Robertson, President of Allerium, added:
“We are entering an exciting time for Allerium, one that focuses on innovation and execution as we support the evolution of emergency communications. The market is shifting from traditional voice-based systems toward data-centric communications, real-time coordination and AI-enhanced decision making, creating new opportunities across public safety and mobile networks. We believe Allerium is uniquely positioned to lead this large and growing market for years to come.
Allerium entered fiscal 2027 with
Strategic Transaction
On June 14, 2026, the Company entered into a definitive Securities Purchase Agreement (the "Purchase Agreement" or "Strategic Transaction") to sell most of its Satellite and Space Communications ("S&S") segment to Wavestream Corporation, an affiliate of Gilat Satellite Networks Ltd ("Gilat"). The Purchase Agreement calls for a base purchase price in cash of
In connection with aligning its operations, strategy and brand with a public safety focus, the Company anticipates investing between approximately
As the Strategic Transaction represents a material strategic shift in the Company's business, the results and net assets of the businesses being sold to Gilat are: (i) considered discontinued operations; and (ii) presented separately from the Company's continuing operations, which consist of the Company's existing Allerium business, the retained cyber security training and related services business and corporate functions, that collectively form one operating segment.
Unless otherwise noted, the results for the fourth quarter and fiscal year 2026 represent the Company's continuing operations, with comparable prior periods recast to reflect these changes.
Fiscal Year 2026 Financial Results
-
Net sales of
$249.6 million -
Gross profit of
38.9% -
Operating loss from continuing operations of
$18.2 million $51.0 million -
Adjusted EBITDA (a Non-GAAP financial measure) of
$20.6 million 8.3% of net sales -
Cash flows provided by operations of
$25.0 million -
Net bookings of
$263.7 million -
Total consolidated liquidity at year end of
$61.3 million
Fourth Quarter 2026 Financial Results
-
Net sales of
$66.2 million -
Gross profit of
40.6% -
Operating loss from continuing operations of
$3.9 million $9.4 million -
Adjusted EBITDA (a Non-GAAP financial measure) of
$9.2 million 13.9% of net sales -
Cash flows provided by operations of
$18.5 million -
Net bookings of
$32.0 million -
Funded backlog of
$520.4 million $862.0 million
Fiscal 2026 Commentary
Net sales were
Gross profit was
Operating loss from continuing operations was
Net loss from continuing operations attributable to common stockholders in fiscal 2026 and 2025 was
Adjusted EBITDA increased to
Cash provided by operating activities was
Bookings were
Fourth Quarter Fiscal 2026 Commentary
Net sales were
Gross profit was
Operating loss from continuing operations was
Restructuring costs during the fourth quarter of fiscal 2026 principally related to the Company's strategic alternatives review process, which concluded with the Strategic Transaction announced on June 15, 2026. Following the expected closing of the Strategic Transaction in calendar 2026, the Company plans to align its operations, strategy and brand with Allerium's public safety focus.
Net loss from continuing operations attributable to common stockholders was
Adjusted EBITDA was
Cash provided by operating activities was
With strategic wins in the
Bookings were
Key contract awards during the fourth quarter of fiscal 2026 included:
-
over
$8.0 million -
approximately
$6.5 million U.S . government customers; -
in excess of
$2.5 million -
over
$1.0 million
According to a 2026 Next Generation 9-1-1 report published by Frost & Sullivan, a leading third-party research firm, Allerium was the second leading provider of next generation core services ("NGCS") based on both primary contracts held and
In May 2026, the Company announced the opening of its new purpose-built facility in
In June 2026, the Company launched Allerium Mira, a multi-tenant, cloud-agnostic solution that gives public safety agencies a flexible and secure alternative to traditional on-premise call handling systems, with the scalability to grow as their needs evolve. In June 2026, the Company also announced Allerium Coral, a new network-native capability that advances how critical information is coordinated and exchanged across NG9-1-1 environments. While Allerium Coral focuses on the secure exchange, coordination and continuity of critical information across systems, agencies and workflows, Allerium Mira provides the environment where such call handling information can be received, understood and acted upon.
In June 2026, Jeff Robertson, President of Allerium, was appointed to the Board of the First Responder Network Authority ("FirstNet Authority"), the independent federal authority responsible for overseeing the development and evolution of FirstNet, the nationwide public safety broadband network dedicated to first responders in the
Capital Structure and Liquidity
Upon signing of the Strategic Transaction, the Company received a
Contemporaneously with signing the Strategic Transaction during the fourth quarter of fiscal 2026, at a time when the Company was in compliance with the terms and covenants of each of its credit facilities, the Company entered into various amendments to its Credit Facility, Subordinated Credit Facility and convertible preferred stock agreements which enhance its overall financial flexibility and reduce its anticipated cost of capital. Such enhanced financial flexibility includes: (i) an extension of the covenant holiday under its Credit Facility and Subordinated Credit Facility to July 31, 2027; (ii) waiver of the fiscal 2026 excess cash flow prepayment under its Credit Facility; (iii) deferral of previously scheduled make whole escalations on applicable portions of the Subordinated Credit Facility until April 1, 2027 if the loans are not prepaid by that time; (iv) a
The Board of Directors appointed Christopher Maloney as an independent director, effective October 1, 2026. Mr. Maloney's extensive leadership experience in building, leading and governing public safety and mission critical communications technology companies, including direct operating and board service in 9-1-1 dispatch and emergency communications, qualifies him to serve on the Board.
Conference Call and Webcast Information
Comtech will host a conference call with investors and analysts on Wednesday, October 14, 2026, at 5:00 pm Eastern Time.
A live webcast of the conference call will be accessible on the Investor Relations section of Comtech’s website at www.comtech.com/investors. Alternatively, investors can access the conference call by dialing (800) 445-7795 (primary) or (785) 424-1699 (alternate) and using the conference I.D. of “Comtech.” A replay will be available through Wednesday, October 28, 2026, by dialing (800) 839-9719 or (402) 220-6091.
About Comtech
Comtech is transitioning to a focused communications technology company with deep expertise in public safety and mobile networks and a unique command of where they intersect. Through its Allerium segment, Comtech provides infrastructure and software that help locate, route, deliver, answer and coordinate 9-1-1 and emergency communications, while providing mobile network operators with carrier-grade location, messaging and public alerting capabilities. Together, these capabilities connect people, devices and critical information when every connection counts.
In June 2026, Comtech agreed to sell most of its Satellite and Space Communications business to Gilat Satellite Networks Ltd. The transaction remains subject to regulatory approvals and customary closing conditions. For more information, please visit www.comtech.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this press release contains, and oral statements made by its representatives from time to time may contain, forward-looking statements. Forward-looking statements can be identified by words such as: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goal,” “outlook,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would,” and similar references to future periods, or the negative of those words and expressions, as well as statements in future tense. Forward-looking statements include, among others, statements regarding the expected completion of, the anticipated benefits of, and its plans, strategies and objectives relating to, the pending transaction with Gilat Satellite Networks Ltd, including the time frame in which such proposed transaction will occur, its expectations for further portfolio-shaping opportunities, its expectations for other operational initiatives, its expectations for completing further financing initiatives, its future performance and financial condition, the plans and objectives of its management (including anticipated changes to executive leadership) and its assumptions regarding such future performance, financial condition, and plans and objectives that involve certain significant known and unknown risks and uncertainties and other factors not under its control which may cause its actual results, future performance and financial condition, and achievement of its plans and objectives of its management to be materially different from the results, performance or other expectations implied by these forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or its good faith belief with respect to future events, and is subject to risks and uncertainties that are difficult to predict and many of which are outside of its control. Factors that could cause actual results to differ materially from current expectations include, among other things: its ability to consummate the transactions on a timely basis or at all; unexpected costs, liabilities or delays in connection with the proposed transaction; the significant transaction costs associated with the proposed transaction; negative effects of the announcement, pendency or consummation of the transaction on the market price of its common stock or operating results, including as a result of changes in key customer, supplier, employee or other business relationships; the risk of litigation or regulatory actions; its inability to retain and hire key personnel; further portfolio-shaping opportunities, other operational initiatives, and the completion of further financing activities; its ability to access capital and liquidity; changes in its executive leadership; the possibility that the expected benefits from its strategic activities will not be fully realized, or will not be realized within the anticipated time periods; the risk that acquired businesses will not be integrated successfully; impacts from, and uncertainties regarding, future actions that may be taken by activist stockholders; the possibility of disruption from acquisitions or dispositions, making it more difficult to maintain business and operational relationships or retain key personnel; the risk that it will be unsuccessful in implementing a tactical shift in its Satellite and Space Communications segment away from bidding on large commodity service contracts and toward pursuing contracts for its niche products and solutions with higher margins; the nature and timing of its receipt of, and its performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; the timing and amount of adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; new product announcements and enhancements or rebranding; changing customer demands and/or procurement strategies and its ability to scale opportunities and deliver solutions to current and prospective customers; changes and uncertainty in prevailing economic and political conditions (including financial and capital market conditions), including as a result of military conflicts or any tariff, trade restrictions or similar matters; impact of government shutdowns; changes to government procurement practices; changes in the price of oil in global markets; changes in prevailing interest rates and foreign currency exchange rates; risks associated with its legal proceedings, customer claims for indemnification, and other similar matters; risks associated with its obligations under its credit facilities; risks associated with its large contracts; risks associated with supply chain disruptions; and other factors described in this and its other filings with the Securities and Exchange Commission (“SEC”). However, these risks are not the only risks that it faces. Additional risks and uncertainties, not currently known to the Company or that do not currently appear to be material, may also materially adversely affect its business, financial condition and/or operating results in the future. The Company describes risks and uncertainties that could cause actual results and events to differ materially in the “Risk Factors” (Part I, Item 1A) and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part II, Item 7) sections of its Annual Report on Form 10-K, filed with the SEC on October 14, 2026, as the same may be updated from time to time in the Company's various filings with the SEC. The Company does not intend to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law.
Appendix:
- Condensed Consolidated Statements of Operations (Unaudited)
- Condensed Consolidated Balance Sheets (Unaudited)
- Condensed Consolidated Statements of Cash Flows (Unaudited)
- Use of Non-GAAP Financial Measures
- Reconciliation of Pro Forma GAAP Net Loss from Continuing Operations to Pro Forma Adjusted EBITDA
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||
|
|
(Unaudited) |
|
(Audited) |
||||||||||
|
|
Three months ended July 31, |
|
Twelve months ended July 31, |
||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
|
2026 |
|
|
2025 |
|
Net sales |
|
$ |
66,232,000 |
|
|
75,332,000 |
|
|
$ |
249,613,000 |
|
|
300,871,000 |
|
Cost of sales |
|
|
39,367,000 |
|
|
49,160,000 |
|
|
|
152,437,000 |
|
|
205,664,000 |
|
Gross profit |
|
|
26,865,000 |
|
|
26,172,000 |
|
|
|
97,176,000 |
|
|
95,207,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Expenses: |
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative |
|
|
24,325,000 |
|
|
19,026,000 |
|
|
|
87,855,000 |
|
|
88,129,000 |
|
Research and development |
|
|
2,784,000 |
|
|
3,066,000 |
|
|
|
11,577,000 |
|
|
11,725,000 |
|
Amortization of intangibles |
|
|
3,567,000 |
|
|
3,789,000 |
|
|
|
14,763,000 |
|
|
15,154,000 |
|
Impairment of long-lived assets, including goodwill |
|
|
— |
|
|
— |
|
|
|
— |
|
|
5,304,000 |
|
CEO transition costs |
|
|
66,000 |
|
|
1,045,000 |
|
|
|
1,162,000 |
|
|
2,117,000 |
|
Proxy solicitation costs |
|
|
— |
|
|
— |
|
|
|
— |
|
|
2,682,000 |
|
|
|
|
30,742,000 |
|
|
26,926,000 |
|
|
|
115,357,000 |
|
|
125,111,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Operating loss from continuing operations |
|
|
(3,877,000 |
) |
|
(754,000 |
) |
|
|
(18,181,000 |
) |
|
(29,904,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Other expenses (income): |
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
5,767,000 |
|
|
5,734,000 |
|
|
|
21,339,000 |
|
|
19,011,000 |
|
Interest (income) and other |
|
|
471,000 |
|
|
179,000 |
|
|
|
3,000 |
|
|
(118,000 |
) |
Write-off of deferred financing costs and debt discounts |
|
|
— |
|
|
4,086,000 |
|
|
|
— |
|
|
8,977,000 |
|
Change in fair value of warrants and derivatives |
|
|
(12,326,000 |
) |
|
(23,048,000 |
) |
|
|
(22,089,000 |
) |
|
(38,498,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Income (loss) from continuing operations before income taxes |
|
|
2,211,000 |
|
|
12,295,000 |
|
|
|
(17,434,000 |
) |
|
(19,276,000 |
) |
Provision for (benefit from) income taxes |
|
|
82,000 |
|
|
1,936,000 |
|
|
|
847,000 |
|
|
(279,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations |
|
|
2,129,000 |
|
|
10,359,000 |
|
|
|
(18,281,000 |
) |
|
(18,997,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Discontinued operations: |
|
|
|
|
|
|
|
|
||||||
Loss from discontinued operations before income taxes |
|
|
(5,211,000 |
) |
|
(3,830,000 |
) |
|
|
(16,807,000 |
) |
|
(136,106,000 |
) |
Provision for (benefit from) income taxes |
|
|
120,000 |
|
|
(1,381,000 |
) |
|
|
1,081,000 |
|
|
199,000 |
|
Net loss from discontinued operations |
|
|
(5,331,000 |
) |
|
(2,449,000 |
) |
|
|
(17,888,000 |
) |
|
(136,305,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income |
|
|
(3,202,000 |
) |
|
7,910,000 |
|
|
|
(36,169,000 |
) |
|
(155,302,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Gain on extinguishment of convertible preferred stock |
|
|
— |
|
|
— |
|
|
|
— |
|
|
51,179,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Adjustments to reflect redemption value of convertible preferred stock: |
|
|
|
|
|
|
|
|
||||||
Dividends on convertible preferred stock, net |
|
|
(11,525,000 |
) |
|
(19,472,000 |
) |
|
|
(32,763,000 |
) |
|
(100,128,000 |
) |
Net loss attributable to common stockholders |
|
$ |
(14,727,000 |
) |
|
(11,562,000 |
) |
|
$ |
(68,932,000 |
) |
|
(204,251,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net loss per common share: |
|
|
|
|
|
|
|
|
||||||
Basic and diluted - continuing operations |
|
$ |
(0.31 |
) |
|
(0.31 |
) |
|
$ |
(1.71 |
) |
|
(2.31 |
) |
Basic and diluted - discontinued operations |
|
|
(0.18 |
) |
|
(0.08 |
) |
|
|
(0.60 |
) |
|
(4.64 |
) |
Basic and diluted |
|
$ |
(0.49 |
) |
|
(0.39 |
) |
|
$ |
(2.31 |
) |
|
(6.95 |
) |
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent shares outstanding – basic and diluted |
|
|
29,978,000 |
|
|
29,436,000 |
|
|
|
29,845,000 |
|
|
29,405,000 |
|
|
|
|
|
|
|
|
|
|
||||||
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||
Condensed Consolidated Balance Sheets |
||||||
(Audited) |
||||||
|
July 31, 2026 |
|
July 31, 2025 |
|||
Assets |
|
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
34,978,000 |
|
|
35,371,000 |
|
Accounts receivable, net |
|
67,803,000 |
|
|
87,176,000 |
|
Inventories, net |
|
10,510,000 |
|
|
6,936,000 |
|
Prepaid expenses and other current assets |
|
12,627,000 |
|
|
13,775,000 |
|
Current assets of discontinued operations held for sale |
|
117,341,000 |
|
|
127,987,000 |
|
Total current assets |
|
243,259,000 |
|
|
271,245,000 |
|
Property, plant and equipment, net |
|
30,976,000 |
|
|
27,960,000 |
|
Operating lease right-of-use assets, net |
|
9,914,000 |
|
|
9,527,000 |
|
Goodwill |
|
176,126,000 |
|
|
176,126,000 |
|
Intangibles with finite lives, net |
|
120,664,000 |
|
|
135,427,000 |
|
Deferred financing costs, net |
|
1,454,000 |
|
|
1,908,000 |
|
Other assets, net |
|
9,324,000 |
|
|
10,457,000 |
|
Non-current assets of discontinued operations held for sale |
|
104,045,000 |
|
|
109,246,000 |
|
Total assets |
$ |
695,762,000 |
|
|
741,896,000 |
|
Liabilities, Convertible Preferred Stock and Stockholders’ Equity |
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
20,751,000 |
|
|
14,660,000 |
|
Accrued expenses and other current liabilities |
|
47,362,000 |
|
|
41,076,000 |
|
Current portion of credit facility, net |
|
76,609,000 |
|
|
4,050,000 |
|
Current portion of subordinated credit facility, net |
|
44,408,000 |
|
|
— |
|
Operating lease liabilities, current |
|
3,210,000 |
|
|
3,426,000 |
|
Contract liabilities |
|
43,758,000 |
|
|
41,955,000 |
|
Interest payable |
|
283,000 |
|
|
15,000 |
|
Current liabilities of discontinued operations held for sale |
|
54,190,000 |
|
|
53,067,000 |
|
Total current liabilities |
|
290,571,000 |
|
|
158,249,000 |
|
Non-current portion of credit facility, net |
|
21,400,000 |
|
|
114,414,000 |
|
Non-current portion of subordinated credit facility, net |
|
62,920,000 |
|
|
95,588,000 |
|
Operating lease liabilities, non-current |
|
9,423,000 |
|
|
8,907,000 |
|
Income taxes payable, non-current |
|
1,444,000 |
|
|
1,611,000 |
|
Long-term contract liabilities |
|
16,429,000 |
|
|
21,005,000 |
|
Warrant and derivative liabilities |
|
4,481,000 |
|
|
17,849,000 |
|
Other liabilities |
|
3,509,000 |
|
|
3,450,000 |
|
Non-current liabilities of discontinued operations held for sale |
|
24,698,000 |
|
|
26,856,000 |
|
Total liabilities |
|
434,875,000 |
|
|
447,929,000 |
|
Commitments and contingencies |
|
|
|
|||
Convertible preferred stock, par value |
|
221,983,000 |
|
|
189,545,000 |
|
Stockholders’ equity: |
|
|
|
|||
Preferred stock, par value |
|
— |
|
|
— |
|
Common stock, par value |
|
4,502,000 |
|
|
4,444,000 |
|
Additional paid-in capital |
|
519,315,000 |
|
|
548,722,000 |
|
Accumulated deficit |
|
(43,064,000 |
) |
|
(6,895,000 |
) |
|
|
480,753,000 |
|
|
546,271,000 |
|
Less: |
|
|
|
|||
Treasury stock, at cost (15,033,317 shares at July 31, 2026 and 2025) |
|
(441,849,000 |
) |
|
(441,849,000 |
) |
Total stockholders’ equity |
|
38,904,000 |
|
|
104,422,000 |
|
Total liabilities, convertible preferred stock and stockholders’ equity |
$ |
695,762,000 |
|
|
741,896,000 |
|
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||||
|
|
(Unaudited) |
|
(Audited) |
||||||||||
|
|
Three months ended July 31, |
|
Twelve months ended July 31, |
||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
|
2026 |
|
|
2025 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
||||||
Net (loss) income |
|
$ |
(3,202,000 |
) |
|
7,910,000 |
|
|
$ |
(36,169,000 |
) |
|
(155,302,000 |
) |
Less: Net loss from discontinued operations |
|
|
(5,331,000 |
) |
|
(2,449,000 |
) |
|
|
(17,888,000 |
) |
|
(136,305,000 |
) |
Net income (loss) from continuing operations |
|
|
2,129,000 |
|
|
10,359,000 |
|
|
|
(18,281,000 |
) |
|
(18,997,000 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization of property, plant and equipment |
|
|
2,663,000 |
|
|
2,589,000 |
|
|
|
9,778,000 |
|
|
8,813,000 |
|
Amortization of intangible assets |
|
|
3,567,000 |
|
|
3,789,000 |
|
|
|
14,763,000 |
|
|
15,154,000 |
|
Amortization of stock-based compensation |
|
|
1,023,000 |
|
|
430,000 |
|
|
|
3,121,000 |
|
|
2,238,000 |
|
Paid-in-kind interest under term loan |
|
|
— |
|
|
— |
|
|
|
— |
|
|
1,850,000 |
|
Amortization of deferred financing costs, debt discount and accreted interest related to subordinated credit facility |
|
|
4,101,000 |
|
|
2,059,000 |
|
|
|
14,352,000 |
|
|
3,098,000 |
|
Amortization of deferred financing costs and debt discount related to credit facility |
|
|
561,000 |
|
|
648,000 |
|
|
|
1,760,000 |
|
|
2,176,000 |
|
Write-off of deferred financing costs and debt discounts |
|
|
— |
|
|
4,086,000 |
|
|
|
— |
|
|
8,977,000 |
|
Change in fair value of warrants and derivatives |
|
|
(12,326,000 |
) |
|
(23,048,000 |
) |
|
|
(22,089,000 |
) |
|
(38,498,000 |
) |
Loss on disposal of property plant and equipment |
|
|
— |
|
|
— |
|
|
|
— |
|
|
11,000 |
|
(Benefit from) provision for allowance for doubtful accounts and contract assets |
|
|
(271,000 |
) |
|
50,000 |
|
|
|
(302,000 |
) |
|
375,000 |
|
Provision for excess and obsolete inventory |
|
|
396,000 |
|
|
260,000 |
|
|
|
492,000 |
|
|
261,000 |
|
Deferred income tax (benefit) expense |
|
|
(29,000 |
) |
|
(928,000 |
) |
|
|
1,032,000 |
|
|
(1,187,000 |
) |
Impairment of long-lived assets, including goodwill |
|
|
— |
|
|
— |
|
|
|
— |
|
|
5,304,000 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
||||||
Accounts receivable |
|
|
10,163,000 |
|
|
308,000 |
|
|
|
19,675,000 |
|
|
(8,472,000 |
) |
Inventories |
|
|
(1,650,000 |
) |
|
995,000 |
|
|
|
(4,066,000 |
) |
|
1,134,000 |
|
Prepaid expenses and other current assets |
|
|
2,342,000 |
|
|
(2,014,000 |
) |
|
|
99,000 |
|
|
(2,731,000 |
) |
Other assets |
|
|
475,000 |
|
|
(307,000 |
) |
|
|
709,000 |
|
|
745,000 |
|
Accounts payable |
|
|
7,200,000 |
|
|
(1,031,000 |
) |
|
|
6,043,000 |
|
|
(6,752,000 |
) |
Accrued expenses and other current liabilities |
|
|
1,974,000 |
|
|
(3,657,000 |
) |
|
|
1,018,000 |
|
|
(1,914,000 |
) |
Contract liabilities |
|
|
(2,960,000 |
) |
|
1,273,000 |
|
|
|
(2,773,000 |
) |
|
1,767,000 |
|
Other liabilities, non-current |
|
|
(431,000 |
) |
|
(46,000 |
) |
|
|
68,000 |
|
|
(95,000 |
) |
Interest payable |
|
|
(197,000 |
) |
|
10,000 |
|
|
|
(211,000 |
) |
|
(1,057,000 |
) |
Income taxes payable |
|
|
(262,000 |
) |
|
3,010,000 |
|
|
|
(203,000 |
) |
|
(1,394,000 |
) |
Net cash provided by (used in) operating activities from continuing operations |
|
|
18,468,000 |
|
|
(1,165,000 |
) |
|
|
24,985,000 |
|
|
(29,194,000 |
) |
Net cash (used in) provided by operating activities from discontinued operations |
|
|
(112,000 |
) |
|
12,612,000 |
|
|
|
12,425,000 |
|
|
20,902,000 |
|
Net cash provided by (used in) operating activities |
|
|
18,356,000 |
|
|
11,447,000 |
|
|
|
37,410,000 |
|
|
(8,292,000 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment |
|
|
(3,287,000 |
) |
|
(2,009,000 |
) |
|
|
(15,223,000 |
) |
|
(8,228,000 |
) |
Proceeds from sale of indefinite lived intangible assets |
|
|
552,000 |
|
|
— |
|
|
|
565,000 |
|
|
— |
|
Net cash used in investing activities from continuing operations |
|
|
(2,735,000 |
) |
|
(2,009,000 |
) |
|
|
(14,658,000 |
) |
|
(8,228,000 |
) |
Net cash provided by (used in) investing activities from discontinued operations |
|
|
9,931,000 |
|
|
(27,000 |
) |
|
|
8,748,000 |
|
|
(337,000 |
) |
Net cash provided by (used in) investing activities |
|
|
7,196,000 |
|
|
(2,036,000 |
) |
|
|
(5,910,000 |
) |
|
(8,565,000 |
) |
|
|
|
|
|
|
|
|
(Continued) |
||||||
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||||
|
|
(Unaudited) |
|
(Audited) |
||||||||||
|
|
Three months ended July 31, |
|
Twelve months ended July 31, |
||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
|
2026 |
|
|
2025 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
||||||
Net payments under revolving loans |
|
$ |
(3,641,000 |
) |
|
(5,775,000 |
) |
|
$ |
(17,641,000 |
) |
|
(14,859,000 |
) |
Repayment of term loan |
|
|
(7,512,000 |
) |
|
(29,494,000 |
) |
|
|
(10,550,000 |
) |
|
(56,746,000 |
) |
Repayment of subordinated credit facility |
|
|
(3,021,000 |
) |
|
— |
|
|
|
(3,021,000 |
) |
|
— |
|
Proceeds from subordinated credit facility |
|
|
— |
|
|
35,000,000 |
|
|
|
— |
|
|
100,000,000 |
|
Payment of deferred financing costs and debt discount |
|
|
(450,000 |
) |
|
(325,000 |
) |
|
|
(450,000 |
) |
|
(4,545,000 |
) |
Contribution for constructing long-lived assets |
|
|
— |
|
|
2,814,000 |
|
|
|
— |
|
|
2,814,000 |
|
Payment of convertible preferred stock consent fee |
|
|
— |
|
|
— |
|
|
|
— |
|
|
(650,000 |
) |
Payment of convertible preferred stock amendment fees |
|
|
(80,000 |
) |
|
— |
|
|
|
(80,000 |
) |
|
(76,000 |
) |
Cash dividends paid on common stock |
|
|
— |
|
|
(1,000 |
) |
|
|
(32,000 |
) |
|
(158,000 |
) |
Remittance of employees’ statutory tax withholding for stock awards |
|
|
(225,000 |
) |
|
(62,000 |
) |
|
|
(688,000 |
) |
|
(1,248,000 |
) |
Proceeds from issuance of employee stock purchase plan shares |
|
|
18,000 |
|
|
17,000 |
|
|
|
95,000 |
|
|
118,000 |
|
Payment of shelf registration costs |
|
|
(169,000 |
) |
|
— |
|
|
|
(181,000 |
) |
|
(207,000 |
) |
Net cash (used in) provided by financing activities from continuing operations |
|
|
(15,080,000 |
) |
|
2,174,000 |
|
|
|
(32,548,000 |
) |
|
24,443,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets of discontinued operations held for sale |
|
$ |
10,472,000 |
|
|
11,585,000 |
|
|
$ |
(1,048,000 |
) |
|
7,586,000 |
|
Less: Net (decrease) increase in cash classified within current assets of discontinued operations held for sale |
|
|
(1,062,000 |
) |
|
2,191,000 |
|
|
|
(655,000 |
) |
|
1,097,000 |
|
Net increase (decrease) in cash and cash equivalents from continuing operations |
|
|
11,534,000 |
|
|
9,394,000 |
|
|
|
(393,000 |
) |
|
6,489,000 |
|
Cash and cash equivalents at beginning of period |
|
|
23,444,000 |
|
|
25,977,000 |
|
|
|
35,371,000 |
|
|
28,882,000 |
|
Cash and cash equivalents at end of period |
|
$ |
34,978,000 |
|
|
35,371,000 |
|
|
$ |
34,978,000 |
|
|
35,371,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding the Company’s financial results, this release contains “Non-GAAP financial measures” under the rules of the SEC. The Company’s Adjusted EBITDA is a Non-GAAP measure that represents earnings (loss) before interest, income taxes, depreciation, amortization of intangibles, impairment of long-lived assets, including goodwill, amortization of stock-based compensation, CEO transition costs, change in fair value of warrants and derivatives, proxy solicitation costs, restructuring costs and write-off of deferred financing costs and debt discounts, and in the recent past, amortization of cost to fulfill assets, strategic emerging technology costs (for next-generation satellite technology), acquisition plan expenses, change in fair value of the convertible preferred stock purchase option liability, COVID-19 related costs, facility exit costs, strategic alternatives expenses and other and loss on business divestiture. These items, while periodically affecting its results, may vary significantly from period to period and may have a disproportionate effect in a given period, thereby affecting the comparability of results. Although closely aligned, the Company’s definition of Adjusted EBITDA is different than EBITDA (as such term is defined in its Credit Facility and Subordinated Credit Facility) utilized for financial covenant calculations and also may differ from the definition of EBITDA or Adjusted EBITDA used by other companies and therefore may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, as well as adjusted operating income (loss), net income (loss) attributable to common shareholders and net income (loss) per diluted common share, as presented in the tables, are Non-GAAP measures. These Non-GAAP measures are frequently requested by investors and analysts. The Company believes that investors and analysts may use these Non-GAAP measures along with other information contained in its SEC filings, including GAAP measures, in assessing its performance and comparability of its results with other companies. The Company’s Non-GAAP measures reflect the GAAP measures as reported, adjusted for certain items as described herein and also excludes the effects of the Company’s outstanding convertible preferred stock.
These Non-GAAP financial measures have limitations as an analytical tool as they exclude the financial impact of transactions necessary to conduct its business, such as the granting of equity compensation awards, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. These measures are adjusted as described in the reconciliation of GAAP to Non-GAAP measures in the tables presented herein, but these adjustments should not be construed as an inference that all of these adjustments or costs are unusual, infrequent or non-recurring. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures determined in accordance with GAAP. Investors are advised to carefully review the GAAP financial results that are disclosed in the Company’s SEC filings. As the Company has not provided future Non-GAAP financial guidance or targets, there is no need to reconcile its business outlook to the most directly comparable GAAP measures. Furthermore, even if guidance or targets had been provided, items such as stock-based compensation, adjustments to the provision for income taxes, amortization of intangibles and interest expense, which are specific items that impact these measures, have not yet occurred, are out of the Company’s control, or cannot be predicted at this time. For example, quantification of stock-based compensation expense requires inputs such as the number of shares granted and market price that are not currently ascertainable. Accordingly, reconciliations to the Non-GAAP forward looking metrics would not be available without unreasonable effort and such unavailable reconciling items could significantly impact the Company’s financial results.
|
Three months ended July 31, |
|
Twelve months ended July 31, |
||||||||||||
|
|
2026 |
|
|
|
2025 |
|
|
|
2026 |
|
|
|
2025 |
|
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA: |
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations |
$ |
2,129,000 |
|
|
$ |
10,359,000 |
|
|
$ |
(18,281,000 |
) |
|
$ |
(18,997,000 |
) |
Provision for (benefit from) income taxes |
|
82,000 |
|
|
|
1,936,000 |
|
|
|
847,000 |
|
|
|
(279,000 |
) |
Interest expense |
|
5,767,000 |
|
|
|
5,734,000 |
|
|
|
21,339,000 |
|
|
|
19,011,000 |
|
Interest (income) and other |
|
471,000 |
|
|
|
179,000 |
|
|
|
3,000 |
|
|
|
(118,000 |
) |
Write-off of deferred financing costs and debt discounts |
|
— |
|
|
|
4,086,000 |
|
|
|
— |
|
|
|
8,977,000 |
|
Change in fair value of warrants and derivatives |
|
(12,326,000 |
) |
|
|
(23,048,000 |
) |
|
|
(22,089,000 |
) |
|
|
(38,498,000 |
) |
Amortization of stock-based compensation |
|
1,023,000 |
|
|
|
430,000 |
|
|
|
3,121,000 |
|
|
|
2,238,000 |
|
Amortization of intangibles |
|
3,567,000 |
|
|
|
3,789,000 |
|
|
|
14,763,000 |
|
|
|
15,154,000 |
|
Impairment of long-lived assets, including goodwill |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,304,000 |
|
Depreciation |
|
2,663,000 |
|
|
|
2,589,000 |
|
|
|
9,778,000 |
|
|
|
8,813,000 |
|
Restructuring costs |
|
5,747,000 |
|
|
|
414,000 |
|
|
|
9,984,000 |
|
|
|
10,016,000 |
|
CEO transition costs |
|
66,000 |
|
|
|
1,045,000 |
|
|
|
1,162,000 |
|
|
|
2,117,000 |
|
Proxy solicitation costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,682,000 |
|
Adjusted EBITDA |
$ |
9,189,000 |
|
|
$ |
7,513,000 |
|
|
$ |
20,627,000 |
|
|
$ |
16,420,000 |
|
Reconciliations of GAAP consolidated results to the corresponding Non-GAAP measures are shown in the tables below (numbers and per share amounts in the tables may not foot due to rounding). Non-GAAP results reflect Non-GAAP provisions for (benefits from) income taxes based on year-to-date results, as adjusted for the Non-GAAP reconciling items included in the tables below. The Company evaluates its Non-GAAP effective income tax rate on an ongoing basis, and it can change from time to time. The Company’s Non-GAAP effective income tax rate can differ materially from its GAAP effective income tax rate.
|
July 31, 2026 |
||||||||||||||||||||||
|
Three months ended |
|
Twelve months ended |
||||||||||||||||||||
|
Operating (Loss)
|
|
Net Loss from Continuing Operations Attributable to Common Stockholders |
|
Net Loss from Continuing Operations Attributable to Common Stockholders per Diluted Common Share* |
|
Operating (Loss) Income
|
|
Net Loss from Continuing Operations Attributable to Common Stockholders |
|
Net Loss from Continuing Operations Attributable to Common Stockholders per Diluted Common Share* |
||||||||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP measures, as reported |
$ |
(3,877,000 |
) |
|
$ |
(9,396,000 |
) |
|
$ |
(0.31 |
) |
|
$ |
(18,181,000 |
) |
|
$ |
(51,044,000 |
) |
|
$ |
(1.71 |
) |
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
11,525,000 |
|
|
|
0.38 |
|
|
|
— |
|
|
|
32,763,000 |
|
|
|
1.10 |
|
Change in fair value of warrants and derivatives |
|
— |
|
|
|
(12,326,000 |
) |
|
|
(0.41 |
) |
|
|
— |
|
|
|
(22,089,000 |
) |
|
|
(0.74 |
) |
Amortization of intangibles |
|
3,567,000 |
|
|
|
3,567,000 |
|
|
|
0.12 |
|
|
|
14,763,000 |
|
|
|
14,763,000 |
|
|
|
0.49 |
|
Amortization of stock-based compensation |
|
1,023,000 |
|
|
|
1,023,000 |
|
|
|
0.04 |
|
|
|
3,121,000 |
|
|
|
3,121,000 |
|
|
|
0.11 |
|
Restructuring costs |
|
5,747,000 |
|
|
|
5,747,000 |
|
|
|
0.19 |
|
|
|
9,984,000 |
|
|
|
9,984,000 |
|
|
|
0.33 |
|
CEO transition costs |
|
66,000 |
|
|
|
66,000 |
|
|
|
— |
|
|
|
1,162,000 |
|
|
|
1,162,000 |
|
|
|
0.04 |
|
Net discrete tax (benefit) expense |
|
— |
|
|
|
(213,000 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
712,000 |
|
|
|
0.02 |
|
Non-GAAP measures |
$ |
6,526,000 |
|
|
$ |
(7,000 |
) |
|
$ |
— |
|
|
$ |
10,849,000 |
|
|
$ |
(10,628,000 |
) |
|
$ |
(0.36 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
July 31, 2025 |
||||||||||||||||||||||
|
Three months ended |
|
Twelve months ended |
||||||||||||||||||||
|
Operating (Loss)
|
|
Net Loss from Continuing Operations Attributable to Common Stockholders |
|
Net Loss from Continuing Operations Attributable to Common Stockholders per Diluted Common Share* |
|
Operating (Loss)
|
|
Net Loss from Continuing Operations Attributable to Common Stockholders |
|
Net Loss from Continuing Operations Attributable to Common Stockholders per Diluted Common Share* |
||||||||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP measures, as reported |
$ |
(754,000 |
) |
|
$ |
(9,113,000 |
) |
|
$ |
(0.31 |
) |
|
$ |
(29,904,000 |
) |
|
$ |
(67,946,000 |
) |
|
$ |
(2.31 |
) |
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
19,472,000 |
|
|
|
0.66 |
|
|
|
— |
|
|
|
100,128,000 |
|
|
|
3.41 |
|
Change in fair value of warrants and derivatives |
|
— |
|
|
|
(23,048,000 |
) |
|
|
(0.78 |
) |
|
|
— |
|
|
|
(38,498,000 |
) |
|
|
(1.31 |
) |
Gain on extinguishment of convertible preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51,179,000 |
) |
|
|
(1.74 |
) |
Impairment of long-lived assets, including goodwill |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,304,000 |
|
|
|
5,304,000 |
|
|
|
0.18 |
|
Amortization of intangibles |
|
3,789,000 |
|
|
|
3,523,000 |
|
|
|
0.12 |
|
|
|
15,154,000 |
|
|
|
14,393,000 |
|
|
|
0.49 |
|
Restructuring costs |
|
564,000 |
|
|
|
529,000 |
|
|
|
0.02 |
|
|
|
10,016,000 |
|
|
|
9,629,000 |
|
|
|
0.33 |
|
Amortization of stock-based compensation |
|
430,000 |
|
|
|
516,000 |
|
|
|
0.02 |
|
|
|
2,238,000 |
|
|
|
2,238,000 |
|
|
|
0.07 |
|
Proxy solicitation costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,682,000 |
|
|
|
2,545,000 |
|
|
|
0.09 |
|
CEO transition costs |
|
1,045,000 |
|
|
|
972,000 |
|
|
|
0.03 |
|
|
|
2,117,000 |
|
|
|
2,009,000 |
|
|
|
0.07 |
|
Net discrete tax benefit |
|
— |
|
|
|
(146,000 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
(476,000 |
) |
|
|
(0.02 |
) |
Non-GAAP measures |
$ |
5,074,000 |
|
|
$ |
(7,295,000 |
) |
|
$ |
(0.25 |
) |
|
$ |
7,607,000 |
|
|
$ |
(21,853,000 |
) |
|
$ |
(0.74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
* Per share amounts may not foot due to rounding. |
|||||||||||||||||||||||
Reconciliation of pro forma GAAP net loss from continuing operations to pro forma Adjusted EBITDA is shown in the table below.
|
Fiscal 2026 |
||
Reconciliation of Pro Forma GAAP Net Loss from Continuing Operations to Pro Forma Adjusted EBITDA(1) |
|
||
Net loss from continuing operations |
$ |
(15,000,000 |
) |
Provision for income taxes |
|
1,000,000 |
|
Interest expense |
|
21,000,000 |
|
Change in fair value of warrants and derivatives |
|
(22,000,000 |
) |
Amortization of stock-based compensation |
|
3,000,000 |
|
Amortization of intangibles |
|
15,000,000 |
|
Depreciation |
|
10,000,000 |
|
Restructuring costs |
|
24,000,000 |
|
CEO transition costs |
|
1,000,000 |
|
Pro Forma Adjusted EBITDA |
$ |
38,000,000 |
|
(1) Pro forma results presented in the above table for fiscal 2026 represent the businesses being retained by Comtech, plus assumptions for transition related costs and anticipated cost savings. The businesses being retained by Comtech include: Allerium, certain cyber-focused assets currently within the S&S segment and corporate functions. Such amounts are unaudited estimates. |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20261014445535/en/
Investor Relations Contact
Maria Ceriello
631-962-7115
Maria.Ceriello@comtech.com
Media Contacts
Andrew Rotheram
206-829-3050
andrew.rotheram@comtech.com
Longacre Square Partners
comtech@longacresquare.com
Source: Comtech Telecommunications Corp.