Comtech Announces Financial Results for Second Quarter of Fiscal 2025
"When I became Comtech's President and CEO on January 13, we announced both unsatisfactory financial results for the first quarter ended October 31, 2024 as well as a comprehensive transformation plan to address longstanding issues and better position the Company going forward. I am pleased to report that we are making strong progress in the execution of that transformation plan which has started to position the Company in a positive trajectory for a successful future,” stated Ken Traub, Chairman, President and CEO.
Consolidated Financial Results
-
Net sales of
$126.6 million -
Gross margin of
26.7% -
Operating loss of
$10.3 million $48.7 million $2.9 million -
Net bookings of
$79.4 million -
Funded backlog of
$763.8 million $1.6 billion
Recent Major Corporate Developments
- Ken Traub joined the Board of Directors on October 31, 2024, was appointed Executive Chairman on November 27, 2024 and became President and Chief Executive Officer on January 13, 2025.
- Under Mr. Traub's leadership, Comtech is executing a comprehensive transformation plan, which includes actions to improve operational discipline, streamline the Company's cost structure, support the growth and development of differentiated, higher margin business initiatives, strengthen the capital structure, explore strategic alternatives and improve the corporate culture by strengthening accountability and enhancing employee morale and productivity.
-
Subsequent to quarter end, on March 3, 2025, Comtech entered into a series of transactions to improve its capital structure and financial flexibility:
-
The Company received a
$40.0 million -
Of the proceeds received,
$27.3 million $3.2 million - The amended Credit Facility waived all events of default, specifically the Net Leverage Ratio and the Fixed Charge Coverage Ratio covenants as of January 31, 2025 (that the Company disclosed it anticipated breaching in its SEC filings, press release and conference call on January 13, 2025) and suspended testing of these covenants such that the next test will be for the quarter ending on October 31, 2025;
-
The amended Credit Facility immediately lowered the interest rates on the Term Loan and Revolver Loan by approximately 470 and 215 basis points, respectively, and lowered the minimum quarterly Average Liquidity covenant from
$20.0 million $17.5 million
-
The Company received a
- Comtech is conducting a comprehensive review of strategic alternatives with TD Cowen and Imperial Capital serving as financial advisors.
Mr. Traub continued,
"As we discussed on January 13, a vital element of our transformation plan is to earn the trust and confidence of all of our stakeholders, and we intend to do that by being transparent, holding ourselves accountable and delivering on our promises. We disclosed at that time that the Company anticipates breaching financial covenants under its Credit Facility as of the next testing date of January 31, 2025 and this could have significant consequences for the Company. We are fortunate to have earned the support of our subordinated debt investors as well as our secured creditors that has enabled us to not only cure these breaches but has also provided us with more financial flexibility going forward. I believe this is a testament to the confidence that our lenders have in our transformation plan and the progress that they see we are making, including improving operational discipline, reducing the cost structure, supporting the growth of higher margin business initiatives and exploring strategic alternatives." Mr. Traub added, "It is particularly gratifying to see the brightening of the corporate culture as employees are increasingly taking pride in the positive trajectory toward a stronger and healthier future for Comtech."
Second Quarter Fiscal 2025 Consolidated Results Commentary
Consolidated net sales were
Consolidated gross profit was
Consolidated operating loss was
Consolidated net loss was
Consolidated Adjusted EBITDA (a non-GAAP measure) was
Consolidated net bookings were
Consolidated backlog was
Satellite and Space Communications Segment Commentary
S&S net sales were
S&S operating income was
S&S net income was
S&S Adjusted EBITDA was
S&S net bookings were
In addition to the business highlights presented above, key S&S contract awards and product launches during the second quarter included, among others:
-
A sole source follow-on contract from L3Harris, valued in excess of
$15.0 million U.S. Air Force andU.S. Army Anti-Jam Modem (“A3M”); Comtech's A3M technologies are engineered to deliver software-defined, secure, and resilient anti-jam SATCOM capabilities forU.S. Air Force andU.S. Army platforms operating around the world; to-date, Comtech has received multiple sole source, follow-on production contracts from L3Harris in excess of$26.0 million -
A contract from an international military end customer, valued in excess of
$4.5 million -
Approximately
$4.0 million -
Approximately
$4.0 million U.S. government customers; -
In excess of
$2.0 million U.S. Army; and -
A sole source production order, valued at approximately
$2.0 million
Terrestrial & Wireless Networks Segment Commentary
T&W net sales were
T&W operating income was
T&W net income was
T&W Adjusted EBITDA was
T&W net bookings were
In addition to the business highlights presented above, key T&W contract wins and renewals during the second quarter included, among others:
-
A funded order, valued at approximately
$8.0 million -
Various funded orders, valued in excess of
$3.0 million U.S. ; -
Incremental funding related to its NG-911 deployment in
South Carolina , valued in excess of$2.0 million -
Incremental funding, valued in excess of
$2.0 million -
A funded order, valued in excess of
$1.5 million U.S. military customer requesting the extension of call handling maintenance and support services.
Cost-Savings and Profit Improvement Initiatives
As previously announced on January 13, 2025, the Company is conducting a thorough review of processes, product lines, staffing levels and cost structures to identify actions that are expected to meaningfully reduce costs, enable a more efficient and effective organization and improve its cash conversion cycle. To that end, the Company notes that since July 2024, it has significantly progressed with its plans to wind down its steerable antenna operations located in the
Liquidity
As previously disclosed on March 3, 2025, the Company amended its Credit Facility and Subordinated Credit Facility to, among other things, waive all defaults, specifically the Net Leverage Ratio and Fixed Charge Coverage Ratio covenants under both facilities as of January 31, 2025 and suspend testing of these covenants until the quarter ending on October 31, 2025, reduce the interest rate associated with the Credit Facility's Term Loan and Revolver Loan, reduce the minimum quarterly Average Liquidity requirement from
-
Qualified cash and cash equivalents were
$26.3 million $21.5 million -
Total outstanding borrowings under the Credit Facility were
$202.9 million $168.0 million $32.5 million $23.4 million -
Total outstanding borrowings under the Subordinated Credit Facility (excluding accreted interest) were
$25.0 million $65.0 million -
Available sources of liquidity, as of March 10, 2025, approximated
$27.4 million
Conference Call and Webcast Information
Comtech will host a conference call with investors and analysts on Wednesday, March 12, 2025 at 5:00 pm Eastern Time. Mr. Traub will lead the call, joined by Michael Bondi, Chief Financial Officer; Daniel Gizinski, President of the Satellite and Space Communications segment; and Jeff Robertson, President of the Terrestrial and Wireless Networks segment. 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) 274-8461 (domestic), or (203) 518-9814 (international) and using the conference I.D. "Comtech." A replay will be available for seven days by dialing (800) 938-2241 (domestic), or (402) 220-1121 (international).
About Comtech
Comtech Telecommunications Corp. is a leading provider of satellite and space communications technologies; terrestrial and wireless network solutions; Next Generation 911 ("NG911") and emergency services; and cloud native capabilities to commercial and government customers around the world. Through its culture of innovation and employee empowerment, Comtech leverages its global presence and decades of technology leadership and experience to create some of the world’s most innovative solutions for mission-critical communications. 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 the Company's 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. Forward-looking statements include, among others, statements regarding its expectations for its strategic alternatives process, expectations for further portfolio-shaping opportunities, expectations for other operational initiatives, the intended use of proceeds from the Credit Facility and Subordinated Credit Facility, expectations for completing further financing initiatives, future performance and financial condition, plans to address its ability to continue as a going concern, the plans and objectives of management and 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 actual results, future performance and financial condition, and achievement of plans and objectives of management to be materially different from the results, performance or other expectations implied by these forward-looking statements. Factors that could cause actual results to differ materially from current expectations include, among other things: the outcome and effectiveness of the aforementioned strategic alternatives process, further portfolio-shaping opportunities, other operational initiatives, and the completion of further financing activities; its ability to access capital and liquidity so that the Company is able to continue as a going concern; its ability to implement changes in executive leadership; the possibility that the expected synergies and benefits from 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 the Company 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 niche products and solutions with higher margins; the nature and timing of receipt of, and performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; new product announcements and enhancements; changing customer demands and/or procurement strategies and ability to scale opportunities and deliver solutions to current and prospective customers; changes in prevailing economic and political conditions, including as a result of
Appendix:
- Condensed Consolidated Statements of Operations (Unaudited)
- Condensed Consolidated Balance Sheets (Unaudited)
- Use of Non-GAAP Financial Measures
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||||||||||
Consolidated Statements of Operations |
||||||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
||||||||||
|
|
Three months ended January 31, |
|
Six months ended January 31, |
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
|
2025 |
|
|
2024 |
|
Net sales |
|
$ |
126,574,000 |
|
|
134,225,000 |
|
|
$ |
242,374,000 |
|
|
286,136,000 |
|
Cost of sales |
|
|
92,834,000 |
|
|
91,027,000 |
|
|
|
194,118,000 |
|
|
195,056,000 |
|
Gross profit |
|
|
33,740,000 |
|
|
43,198,000 |
|
|
|
48,256,000 |
|
|
91,080,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Expenses: |
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative |
|
|
33,832,000 |
|
|
30,307,000 |
|
|
|
85,476,000 |
|
|
63,002,000 |
|
Research and development |
|
|
4,354,000 |
|
|
6,843,000 |
|
|
|
8,067,000 |
|
|
14,655,000 |
|
Amortization of intangibles |
|
|
5,043,000 |
|
|
5,288,000 |
|
|
|
11,636,000 |
|
|
10,577,000 |
|
Impairment of long-lived assets, including goodwill |
|
|
— |
|
|
— |
|
|
|
79,555,000 |
|
|
— |
|
Proxy solicitation costs |
|
|
1,099,000 |
|
|
— |
|
|
|
2,682,000 |
|
|
— |
|
CEO transition costs |
|
|
(331,000 |
) |
|
— |
|
|
|
267,000 |
|
|
— |
|
Gain on business divestiture, net |
|
|
— |
|
|
(2,213,000 |
) |
|
|
— |
|
|
(2,213,000 |
) |
|
|
|
43,997,000 |
|
|
40,225,000 |
|
|
|
187,683,000 |
|
|
86,021,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Operating (loss) income |
|
|
(10,257,000 |
) |
|
2,973,000 |
|
|
|
(139,427,000 |
) |
|
5,059,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Other expenses (income): |
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
11,008,000 |
|
|
5,265,000 |
|
|
|
20,540,000 |
|
|
10,197,000 |
|
Interest (income) and other |
|
|
(126,000 |
) |
|
902,000 |
|
|
|
509,000 |
|
|
837,000 |
|
Write-off of deferred financing costs |
|
|
— |
|
|
— |
|
|
|
1,412,000 |
|
|
— |
|
Change in fair value of warrants and derivatives |
|
|
28,568,000 |
|
|
— |
|
|
|
34,092,000 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Loss before (benefit from) provision for income taxes |
|
|
(49,707,000 |
) |
|
(3,194,000 |
) |
|
|
(195,980,000 |
) |
|
(5,975,000 |
) |
(Benefit from) provision for income taxes |
|
|
(968,000 |
) |
|
7,364,000 |
|
|
|
1,166,000 |
|
|
6,020,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Net loss |
|
$ |
(48,739,000 |
) |
|
(10,558,000 |
) |
|
$ |
(197,146,000 |
) |
|
(11,995,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
(Loss) gain on extinguishment of convertible preferred stock |
|
|
— |
|
|
(13,640,000 |
) |
|
|
51,179,000 |
|
|
(13,640,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Adjustments to reflect redemption value of convertible preferred stock: |
|
|
|
|
|
|
|
|
||||||
Convertible preferred stock issuance costs |
|
|
— |
|
|
(4,273,000 |
) |
|
|
— |
|
|
(4,273,000 |
) |
Deemed contributions (dividends) on convertible preferred stock |
|
|
26,383,000 |
|
|
(2,061,000 |
) |
|
|
(32,251,000 |
) |
|
(3,884,000 |
) |
Net loss attributable to common stockholders |
|
$ |
(22,356,000 |
) |
|
(30,532,000 |
) |
|
$ |
(178,218,000 |
) |
|
(33,792,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net loss per common share: |
|
|
|
|
|
|
|
|
||||||
Basic |
|
$ |
(0.76 |
) |
|
(1.07 |
) |
|
$ |
(6.06 |
) |
|
(1.18 |
) |
Diluted |
|
$ |
(0.76 |
) |
|
(1.07 |
) |
|
$ |
(6.06 |
) |
|
(1.18 |
) |
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding – basic |
|
|
29,339,000 |
|
|
28,662,000 |
|
|
|
29,393,000 |
|
|
28,704,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent shares outstanding – diluted |
|
|
29,339,000 |
|
|
28,662,000 |
|
|
|
29,393,000 |
|
|
28,704,000 |
|
|
|
|
|
|
|
|
|
|
||||||
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||
Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
|
January 31, 2025 |
|
July 31, 2024 |
|||
Assets |
|
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
26,666,000 |
|
|
32,433,000 |
|
Accounts receivable, net |
|
167,197,000 |
|
|
195,595,000 |
|
Inventories, net |
|
81,401,000 |
|
|
93,136,000 |
|
Prepaid expenses and other current assets |
|
14,283,000 |
|
|
15,387,000 |
|
Total current assets |
|
289,547,000 |
|
|
336,551,000 |
|
Property, plant and equipment, net |
|
45,228,000 |
|
|
47,328,000 |
|
Operating lease right-of-use assets, net |
|
30,231,000 |
|
|
31,590,000 |
|
Goodwill |
|
204,625,000 |
|
|
284,180,000 |
|
Intangibles with finite lives, net |
|
183,192,000 |
|
|
194,828,000 |
|
Deferred financing costs, net |
|
1,806,000 |
|
|
3,251,000 |
|
Other assets, net |
|
15,932,000 |
|
|
14,706,000 |
|
Total assets |
$ |
770,561,000 |
|
|
912,434,000 |
|
Liabilities, Convertible Preferred Stock and Stockholders’ Equity |
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
43,056,000 |
|
|
42,477,000 |
|
Accrued expenses and other current liabilities |
|
53,470,000 |
|
|
62,245,000 |
|
Current portion of credit facility, net |
|
186,434,000 |
|
|
4,050,000 |
|
Current portion of subordinated credit facility, net |
|
28,729,000 |
|
|
— |
|
Operating lease liabilities, current |
|
7,363,000 |
|
|
7,869,000 |
|
Contract liabilities |
|
65,616,000 |
|
|
65,834,000 |
|
Interest payable |
|
641,000 |
|
|
1,072,000 |
|
Total current liabilities |
|
385,309,000 |
|
|
183,547,000 |
|
Non-current portion of credit facility, net |
|
— |
|
|
173,527,000 |
|
Operating lease liabilities, non-current |
|
28,667,000 |
|
|
30,258,000 |
|
Income taxes payable, non-current |
|
2,516,000 |
|
|
2,231,000 |
|
Deferred tax liability, net |
|
5,899,000 |
|
|
6,193,000 |
|
Long-term contract liabilities |
|
20,253,000 |
|
|
21,035,000 |
|
Warrant and derivative liabilities |
|
72,746,000 |
|
|
5,254,000 |
|
Other liabilities |
|
4,146,000 |
|
|
4,060,000 |
|
Total liabilities |
|
519,536,000 |
|
|
426,105,000 |
|
Commitments and contingencies |
|
|
|
|||
Convertible preferred stock, par value |
|
122,317,000 |
|
|
180,076,000 |
|
Stockholders’ equity: |
|
|
|
|||
Preferred stock, par value |
|
— |
|
|
— |
|
Common stock, par value |
|
4,438,000 |
|
|
4,377,000 |
|
Additional paid-in capital |
|
614,858,000 |
|
|
640,145,000 |
|
Retained (deficit) earnings |
|
(48,739,000 |
) |
|
103,580,000 |
|
|
|
570,557,000 |
|
|
748,102,000 |
|
Less: |
|
|
|
|||
Treasury stock, at cost (15,033,317 shares at January 31, 2025 and July 31, 2024) |
|
(441,849,000 |
) |
|
(441,849,000 |
) |
Total stockholders’ equity |
|
128,708,000 |
|
|
306,253,000 |
|
Total liabilities, convertible preferred stock and stockholders’ equity |
$ |
770,561,000 |
|
|
912,434,000 |
|
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this release contains "Non-GAAP financial measures" under the rules of the SEC. Our 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 cost to fulfill assets, amortization of stock-based compensation, CEO transition costs, change in fair value of warrants and derivatives, proxy solicitation costs, restructuring costs, strategic emerging technology costs (for next-generation satellite technology), and write-off of deferred financing costs, and in the recent past, 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 our 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, our definition of Adjusted EBITDA is different than EBITDA (as such term is defined in our 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 is also a measure frequently requested by our investors and analysts. We believe that investors and analysts may use Adjusted EBITDA, along with other information contained in our SEC filings, including GAAP measures, in assessing our performance and comparability of our results with other companies. Our Non-GAAP measures reflect the GAAP measures as reported, adjusted for certain items as described herein and also excludes the effects of our 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 our 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 our SEC filings. As we have not provided future financial targets, there is no need to reconcile our business outlook to the most directly comparable GAAP measures. Furthermore, even if 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 our control, or cannot be predicted. 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 our financial results.
|
Three months ended January 31, |
|
Six months ended January 31, |
|
Fiscal Year |
||||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
|
2024 |
|
Reconciliation of GAAP Net Loss to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||||||||
Net loss |
$ |
(48,739,000 |
) |
|
$ |
(10,558,000 |
) |
|
$ |
(197,146,000 |
) |
|
$ |
(11,995,000 |
) |
|
$ |
(99,985,000 |
) |
(Benefit from) provision for income taxes |
|
(968,000 |
) |
|
|
7,364,000 |
|
|
|
1,166,000 |
|
|
|
6,020,000 |
|
|
|
(295,000 |
) |
Interest expense |
|
11,008,000 |
|
|
|
5,265,000 |
|
|
|
20,540,000 |
|
|
|
10,197,000 |
|
|
|
22,153,000 |
|
Interest (income) and other |
|
(126,000 |
) |
|
|
902,000 |
|
|
|
509,000 |
|
|
|
837,000 |
|
|
|
678,000 |
|
Write-off of deferred financing costs |
|
— |
|
|
|
— |
|
|
|
1,412,000 |
|
|
|
— |
|
|
|
1,832,000 |
|
Change in fair value of warrants and derivatives |
|
28,568,000 |
|
|
|
— |
|
|
|
34,092,000 |
|
|
|
— |
|
|
|
(4,273,000 |
) |
Amortization of stock-based compensation |
|
1,170,000 |
|
|
|
2,189,000 |
|
|
|
1,325,000 |
|
|
|
4,834,000 |
|
|
|
6,096,000 |
|
Amortization of intangibles |
|
5,043,000 |
|
|
|
5,288,000 |
|
|
|
11,636,000 |
|
|
|
10,577,000 |
|
|
|
21,154,000 |
|
Depreciation |
|
2,779,000 |
|
|
|
2,930,000 |
|
|
|
5,674,000 |
|
|
|
5,952,000 |
|
|
|
12,159,000 |
|
Impairment of long-lived assets, including goodwill |
|
— |
|
|
|
— |
|
|
|
79,555,000 |
|
|
|
— |
|
|
|
64,525,000 |
|
Amortization of cost to fulfill assets |
|
— |
|
|
|
240,000 |
|
|
|
261,000 |
|
|
|
480,000 |
|
|
|
960,000 |
|
Proxy solicitation costs |
|
1,099,000 |
|
|
|
— |
|
|
|
2,682,000 |
|
|
|
— |
|
|
|
— |
|
CEO transition costs |
|
(331,000 |
) |
|
|
— |
|
|
|
267,000 |
|
|
|
— |
|
|
|
2,916,000 |
|
Restructuring costs |
|
3,400,000 |
|
|
|
2,726,000 |
|
|
|
21,253,000 |
|
|
|
6,442,000 |
|
|
|
12,470,000 |
|
Strategic emerging technology costs |
|
— |
|
|
|
978,000 |
|
|
|
280,000 |
|
|
|
2,348,000 |
|
|
|
4,110,000 |
|
(Gain) loss on business divestiture, net |
|
— |
|
|
|
(2,213,000 |
) |
|
|
— |
|
|
|
(2,213,000 |
) |
|
|
1,199,000 |
|
Adjusted EBITDA |
$ |
2,903,000 |
|
|
$ |
15,111,000 |
|
|
$ |
(16,494,000 |
) |
|
$ |
33,479,000 |
|
|
$ |
45,699,000 |
|
Reconciliations of our GAAP consolidated operating income (loss), net income (loss) attributable to common stockholders and net income (loss) per diluted common share to the corresponding Non-GAAP measures are shown in the tables below. Non-GAAP net income (loss) attributable to common stockholders and Non-GAAP net income (loss) per diluted common share reflect Non-GAAP provisions for income taxes based on year-to-date results, as adjusted for the Non-GAAP reconciling items included in the tables below. We evaluate our Non-GAAP effective income tax rate on an ongoing basis, and it can change from time to time. Our Non-GAAP effective income tax rate can differ materially from our GAAP effective income tax rate.
|
January 31, 2025 |
||||||||||||||||||||||
|
Three months ended |
|
Six months ended |
||||||||||||||||||||
|
Operating
|
|
Net Loss Attributable to Common Stockholders |
|
Net Loss per Diluted Common Share* |
|
Operating
|
|
Net Loss Attributable to Common Stockholders |
|
Net Loss per Diluted Common Share* |
||||||||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP measures, as reported |
$ |
(10,257,000 |
) |
|
$ |
(22,356,000 |
) |
|
$ |
(0.76 |
) |
|
$ |
(139,427,000 |
) |
|
$ |
(178,218,000 |
) |
|
$ |
(6.06 |
) |
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
(26,383,000 |
) |
|
|
(0.90 |
) |
|
|
— |
|
|
|
32,251,000 |
|
|
|
1.10 |
|
Change in fair value of warrants and derivatives |
|
— |
|
|
|
28,568,000 |
|
|
|
0.98 |
|
|
|
— |
|
|
|
34,092,000 |
|
|
|
1.16 |
|
Gain on extinguishment of convertible preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51,179,000 |
) |
|
|
(1.74 |
) |
Impairment of long-lived assets, including goodwill |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
79,555,000 |
|
|
|
79,555,000 |
|
|
|
2.71 |
|
Restructuring costs |
|
3,400,000 |
|
|
|
3,222,000 |
|
|
|
0.11 |
|
|
|
21,253,000 |
|
|
|
20,336,000 |
|
|
|
0.69 |
|
Amortization of intangibles |
|
5,043,000 |
|
|
|
4,806,000 |
|
|
|
0.16 |
|
|
|
11,636,000 |
|
|
|
11,161,000 |
|
|
|
0.38 |
|
Proxy solicitation costs |
|
1,099,000 |
|
|
|
1,022,000 |
|
|
|
0.03 |
|
|
|
2,682,000 |
|
|
|
2,523,000 |
|
|
|
0.09 |
|
Amortization of stock-based compensation |
|
1,170,000 |
|
|
|
1,076,000 |
|
|
|
0.04 |
|
|
|
1,325,000 |
|
|
|
1,206,000 |
|
|
|
0.04 |
|
CEO transition costs |
|
(331,000 |
) |
|
|
(308,000 |
) |
|
|
(0.01 |
) |
|
|
267,000 |
|
|
|
259,000 |
|
|
|
0.01 |
|
Strategic emerging technology costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
280,000 |
|
|
|
266,000 |
|
|
|
0.01 |
|
Amortization of cost to fulfill assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
261,000 |
|
|
|
261,000 |
|
|
|
0.01 |
|
Net discrete tax expense |
|
— |
|
|
|
72,000 |
|
|
|
— |
|
|
|
— |
|
|
|
102,000 |
|
|
|
— |
|
Non-GAAP measures |
$ |
124,000 |
|
|
$ |
(10,281,000 |
) |
|
$ |
(0.35 |
) |
|
$ |
(22,168,000 |
) |
|
$ |
(47,385,000 |
) |
|
$ |
(1.61 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 31, 2024 |
||||||||||||||||||||||
|
Three months ended |
|
Six months ended |
||||||||||||||||||||
|
Operating
|
|
Net Loss Attributable to Common Stockholders |
|
Net Loss per Diluted Common Share* |
|
Operating
|
|
Net (Loss) Income Attributable to Common Stockholders |
|
Net (Loss) Income per Diluted Common Share* |
||||||||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP measures, as reported |
$ |
2,973,000 |
|
|
$ |
(30,532,000 |
) |
|
$ |
(1.07 |
) |
|
$ |
5,059,000 |
|
|
$ |
(33,792,000 |
) |
|
$ |
(1.18 |
) |
Loss on extinguishment of convertible preferred stock |
|
— |
|
|
|
13,640,000 |
|
|
|
0.48 |
|
|
|
— |
|
|
|
13,640,000 |
|
|
|
0.48 |
|
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
6,334,000 |
|
|
|
0.22 |
|
|
|
— |
|
|
|
8,157,000 |
|
|
|
0.29 |
|
Amortization of intangibles |
|
5,288,000 |
|
|
|
4,097,000 |
|
|
|
0.14 |
|
|
|
10,577,000 |
|
|
|
8,194,000 |
|
|
|
0.28 |
|
Restructuring costs |
|
2,726,000 |
|
|
|
2,092,000 |
|
|
|
0.07 |
|
|
|
6,442,000 |
|
|
|
4,953,000 |
|
|
|
0.17 |
|
Amortization of stock-based compensation |
|
2,189,000 |
|
|
|
1,705,000 |
|
|
|
0.06 |
|
|
|
4,834,000 |
|
|
|
3,760,000 |
|
|
|
0.13 |
|
Strategic emerging technology costs |
|
978,000 |
|
|
|
753,000 |
|
|
|
0.03 |
|
|
|
2,348,000 |
|
|
|
1,808,000 |
|
|
|
0.06 |
|
Amortization of cost to fulfill assets |
|
240,000 |
|
|
|
240,000 |
|
|
|
0.01 |
|
|
|
480,000 |
|
|
|
480,000 |
|
|
|
0.02 |
|
Gain on business divestiture, net |
|
(2,213,000 |
) |
|
|
(2,870,000 |
) |
|
|
(0.10 |
) |
|
|
(2,213,000 |
) |
|
|
(1,447,000 |
) |
|
|
(0.05 |
) |
Net discrete tax expense |
|
— |
|
|
|
371,000 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
996,000 |
|
|
|
0.03 |
|
Non-GAAP measures |
$ |
12,181,000 |
|
|
$ |
(4,170,000 |
) |
|
$ |
(0.15 |
) |
|
$ |
27,527,000 |
|
|
$ |
6,749,000 |
|
|
$ |
0.23 |
|
|
Fiscal Year 2024 |
|
|
|
|
||||||||||
|
Operating
|
|
Net (Loss) Income Attributable to Common Stockholders |
|
Net (Loss) Income per Diluted Common Share* |
|
|
|
|
||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
||||||
GAAP measures, as reported |
$ |
(79,890,000 |
) |
|
$ |
(135,440,000 |
) |
|
$ |
(4.70 |
) |
|
|
|
|
Loss on extinguishment of convertible preferred stock |
|
— |
|
|
|
19,555,000 |
|
|
|
0.68 |
|
|
|
|
|
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
15,900,000 |
|
|
|
0.55 |
|
|
|
|
|
Change in fair value of warrants and derivatives |
|
— |
|
|
|
(4,273,000 |
) |
|
|
(0.15 |
) |
|
|
|
|
Impairment of long-lived assets, including goodwill |
|
64,525,000 |
|
|
|
63,800,000 |
|
|
|
2.21 |
|
|
|
|
|
Amortization of intangibles |
|
21,154,000 |
|
|
|
16,389,000 |
|
|
|
0.57 |
|
|
|
|
|
Restructuring costs |
|
12,470,000 |
|
|
|
9,736,000 |
|
|
|
0.34 |
|
|
|
|
|
Amortization of stock-based compensation |
|
6,096,000 |
|
|
|
4,797,000 |
|
|
|
0.17 |
|
|
|
|
|
Strategic emerging technology costs |
|
4,110,000 |
|
|
|
3,795,000 |
|
|
|
0.13 |
|
|
|
|
|
CEO transition costs |
|
2,916,000 |
|
|
|
2,245,000 |
|
|
|
0.08 |
|
|
|
|
|
Loss on business divestiture |
|
1,199,000 |
|
|
|
1,199,000 |
|
|
|
0.04 |
|
|
|
|
|
Amortization of cost to fulfill assets |
|
960,000 |
|
|
|
960,000 |
|
|
|
0.03 |
|
|
|
|
|
Net discrete tax expense |
|
— |
|
|
|
4,136,000 |
|
|
|
0.14 |
|
|
|
|
|
Non-GAAP measures |
$ |
33,540,000 |
|
|
$ |
2,799,000 |
|
|
$ |
0.10 |
|
|
|
|
|
* Per share amounts may not foot due to rounding. In addition, due to the GAAP net loss for the period, Non-GAAP EPS for the six months ended January 31, 2024 and fiscal 2024 was computed using weighted average diluted shares outstanding of 28,958,000 and 29,132,000, during the respective period.
ECMTL
View source version on businesswire.com: https://www.businesswire.com/news/home/20250312646541/en/
Investor Relations Contact
Maria Ceriello
631-962-7115
Maria.Ceriello@comtech.com
Media Contact
Jamie Clegg
480-532-2523
Jamie.Clegg@comtech.com
Rebecca Kral
comtech@longacresquare.com
Source: Comtech Telecommunications Corp.
