Comtech Corrects the Record About Outerbridge’s Latest False Information

MELVILLE, N.Y. –
December 6, 2021– Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or “the Company”), a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies, today announced that it has filed a presentation containing supplemental investor information with the Securities and Exchange Commission (“SEC”) regarding false, misleading and incorrect statements contained in an Outerbridge Capital Management presentation filed with the SEC on December 1, 2021. This presentation and other stockholder materials and information are available at www.ComtechCreates.com.

Outerbridge is a hedge fund that is in the process of fundraising for a dedicated activist fund, and a significant portion of its holdings consist of very short-term call options. Both of these factors create incentives for it to pursue strategies that are not in the best interests of all Comtech shareholders. Outerbridge’s repeated false and misleading claims constitute misinformation, advance only its own interests, and clearly demonstrate a lack of understanding of Comtech’s business. The Company’s Board believes it is important for shareholders to understand the following:

• Outerbridge’s candidates are unfit to serve on Comtech’s Board of Directors and their election directly threatens the Company’s ability to do business. Even a cursory background check of its nominees reveals many red flags.
  • Sidney Fuchs’ appointment would damage key Comtech customer relationships and would be value destructive for shareholders. Fuchs’ role as Chairman of Eutelsat America Corp. presents a material conflict of interest. Several of Comtech’s largest customers – who compete directly with Eutelsat America Corp. and its parent company Eutelsat – have already expressed serious concerns about Mr. Fuchs serving on Comtech’s Board. Eutelsat America’s own assessment of the conflict is completely irrelevant and is circular, self-serving misinformation. Mr. Fuchs’ election would raise many questions, including: how can key customers continue to provide Comtech sensitive information regarding their strategic and planned capabilities if a competitor is sitting on the Board? How could he sit on a hypothetical strategic review committee, as proposed by Outerbridge, recognizing his conflict may introduce bias and prevent Comtech’s shareholders from achieving a value-maximizing outcome? Mr. Fuchs has no accounting experience and served as a director of a public company for less than three months and as President and CEO of the same company for only a few days before resigning, with media reporting a conflict over the strategic direction of the company.
  • Wendi Carpenter brings no relevant experience to Comtech’s business – whether industry, technical, financial, accounting, M&A, or for-profit operational. Ms. Carpenter has served on the board of only one public company, SkyWater Technology, for less than one year. SkyWater’s stock has plummeted 36% following disappointing third quarter earnings in which the company reported a net loss and its principal accounting officer resigned without explanation. This turbulence raises governance concerns and underscores the importance of strong accounting skills on any board. Further, material omissions from her resume continue to raise significant questions about Ms. Carpenter’s ability to oversee corporate governance and complex businesses.

• Strictly speaking, Outerbridge is not on Comtech’s ballot, but its misaligned and short-term interests surely are in the form of its flawed nominees. Although Outerbridge claims its interests are aligned with all shareholders, it has been attempting to raise funds in the wake of its Comtech campaign and has repeatedly traded short-term call options and/or common stock around the issuance of its public letters and Comtech’s earnings. The hedge fund’s actions and highly questionable trades make clear its desire is to trade its many short-term options in Comtech’s stock at prices favorable to itself while creating volatility for Comtech’s long-term shareholders. For example, on June 14, 2021, Outerbridge issued its initial press release two business days after purchasing 100,000 options that were set to expire in just eight days. Later, on October 6, 2021, it publicly issued another highly critical letter just days after purchasing 390,000 call options expiring the following month. Is its near-term profit-seeking the real reason why it brazenly publicizes false and misleading statements? This approach may be beneficial for Outerbridge but it is dangerous for Comtech, its business, its customers, and other shareholders.

• Outerbridge’s repeated false statements about Comtech are a smokescreen for the fact that it regularly obstructed a good faith attempt to evaluate their nominees. Outerbridge’s decisions over many months make us believe that Outerbridge had no desire to achieve a constructive solution with the Company. As admitted to us and a national publication, it was trying to build up its reputation. If it truly wanted a constructive process, it would not have advanced one slate of director candidates; allowed the standard due diligence process to begin; summarily interrupted that process on those candidates by publicly nominating an entirely different set of candidates – and subsequently refused to let Comtech’s Board complete its typical evaluation process. Although Outerbridge claims that Carpenter and Fuchs are independent, in reality, it was able to control them by preventing them from continuing with an interview process. One day our Board was communicating directly with the candidates themselves and then Outerbridge stopped the process. Its actions speak for themselves far more honestly than its words. What was Outerbridge trying to hide and why prevent those candidates from speaking with the very Board members they seek to join?

• Outerbridge’s own case study and limited experience exposes what happens when Outerbridge becomes involved: misstatements, value destruction, and an inability to develop a long-term plan. Outerbridge continues to tout the success of its investment in Barnes & Noble Education (NYSE: BNED). In reality, BNED stock still trades at levels achieved in fiscal year 2015, the stock is down over 40% over the past five years and the company is struggling mightily with COVID. For example, despite the return of students to school in the fall of 2021, BNED’s stock dropped 21% following its most recent quarter results and 41% since October 2021. Further, Outerbridge has made questionable stock sales, with some occurring just days before BNED missed its earnings. For example, its stock sales in late June 2021 accounted for 18% of trading volume. Additionally, while Outerbridge initially pressed BNED to pursue a sale of the company and expressed confidence that a strategic review would yield an acquirer, the company’s process failed to produce a buyer.

  Outerbridge appears to be following a similar playbook at Comtech: short-term trading, a singular short-sighted focus on selling the company, ownership of short-dated options that create a misalignment of incentives with other stockholders, no plan to create value from operations, and an attempt to use its campaign to raise additional funds for itself.

• Outerbridge has misrepresented Comtech’s Board and management, fully ignoring the notable progress the Company has made over the past eighteen months as part of a clear plan to build commercial value for the long term. Over the last five years, Comtech has delivered five-year total shareholder returns of 126.7% – exceeding the S&P 600 (99.7%), the NASDAQ Telecommunications Index (87.5%), and the appropriate peer set (36.7%).¹ Further, the qualifications of Comtech’s nominees clearly show relevance to, and understanding of, the Company’s business.
  • Judy Chambers has highly valuable experience and expertise in categories relevant to Comtech’s business, including the telecom industry, infrastructure projects, finance, governance, and spearheading ESG initiatives. Even Outerbridge acknowledges that Ms. Chambers’ “background evinces a sharp focus on corporate governance principles.” Outerbridge’s wild claim regarding an alleged connection between Magnetar and Ms. Chambers’ employer, Meketa Investment Group, is blatantly false. Here are the facts: Magnetar is not a client of Meketa; Ms. Chambers has no relationship with Magnetar; and Ms. Chambers has never recommended Magnetar to any of her clients.
  • Larry Waldman has been instrumental in transforming Comtech into an industry leader in NextGen 911 and satellite ground station technologies. Since Mr. Waldman joined the Board in 2015, Comtech’s revenues have grown from $307 million to $582 million. Importantly, Mr. Waldman is the Board’s Audit Committee Financial Expert – a designation that neither Outerbridge nominee could hold in the Board’s assessment. Outerbridge attempts to minimize Mr. Waldman’s professional background by blatantly ignoring his current role as Lead Independent Director and Audit Committee Chair of APYX Medical, which was recently named to Forbes’ 2022 America’s Best Small Companies list. The truth is Mr. Waldman brings significantly more public company board experience than either of the Outerbridge nominees combined.

In addition to just making up statements about its own directors and misleading shareholders as to its true trading activities, Outerbridge has fabricated that Comtech’s incoming CEO is moonlighting as a professional money manager when Comtech’s proxy statements for the past 10 years clearly disclose that our CEO owns a holding company that owns intellectual properties and trademarks (including various websites). What Outerbridge failed to highlight is that Mr. Porcelain himself serves on the Board of Directors of Air Industries Group, a public company and U.S. defense contractor. If Outerbridge really had a plan, it would not have to make up false statements or impose the distraction and the significant costs of a contested proxy contest on Comtech shareholders.

Comtech’s Board and management remain focused on executing the company’s strategic plan – leveraging its leading market positions to win new business, fulfilling its commitments to existing customers around the world, and investing to capitalize on a generational technology renewal cycle across core markets. The Company’s recent $100 million strategic growth investment from White Hat Capital Partners, an existing long-term common stockholder, will accelerate the Board and management’s value creation strategy with the participation of an existing stockholder based on months of constructive engagement, significant due diligence, and investment of its own capital.

With significant momentum and experienced, action-oriented leadership, Comtech is well-positioned to drive continued long-term value creation for all shareholders.

Comtech strongly encourages shareholders to vote the BLUE proxy card today FOR Comtech’s two experienced, highly qualified director nominees, Judy Chambers and Larry Waldman. Please do not return or otherwise vote using any White proxy card you may receive from Outerbridge.

À propos de Comtech

Comtech Telecommunications Corp. est l'un des principaux fournisseurs mondiaux de systèmes d'urgence 911 de nouvelle génération et de technologies de communication sans fil sécurisées à des clients commerciaux et gouvernementaux du monde entier. Basée à Melville, dans l'État de New York, Comtech conçoit, produit et commercialise des solutions sans fil avancées et sécurisées, avec une passion pour la réussite de ses clients. Pour de plus amples informations, veuillez consulter le site www.comtechtel.com.

Déclarations prospectives

Certaines informations contenues dans ce communiqué de presse sont de nature prospective et impliquent des risques et des incertitudes importants, notamment en ce qui concerne la trajectoire de nos activités, nos revenus et nos ventes futurs, notre stratégie d'acquisition, les changements en matière de gestion et de gouvernance, et la croissance. Les résultats réels pourraient différer matériellement de ces informations prospectives. Les risques et les incertitudes qui pourraient avoir un impact sur ces déclarations prospectives sont les suivants la possibilité que les synergies et les avantages attendus des récentes acquisitions ne soient pas entièrement réalisés, ou ne le soient pas dans les délais prévus ; le risque que les entreprises acquises ne soient pas intégrées avec succès dans la société ; la possibilité de perturbations dues aux récentes acquisitions, rendant plus difficile le maintien des relations commerciales et opérationnelles ou la conservation du personnel clé ; le risque que la société ne parvienne pas à mettre en œuvre un changement tactique dans son secteur des solutions gouvernementales, en s'éloignant des appels d'offres pour les grands contrats de services de base et en recherchant des contrats pour ses produits de niche avec des marges plus élevées ; la nature et le calendrier de réception, et la performance de la société sur les commandes nouvelles ou existantes qui peuvent entraîner des fluctuations importantes du chiffre d'affaires net et des résultats d'exploitation ; le calendrier et le financement des contrats gouvernementaux ; les ajustements des bénéfices bruts sur les contrats à long terme ; les risques liés aux ventes internationales ; les changements technologiques rapides ; l'évolution des normes industrielles ; les annonces de nouveaux produits et les améliorations ; l'évolution des demandes des clients et des stratégies d'approvisionnement ; l'évolution des conditions économiques et politiques ; l'évolution du prix du pétrole sur les marchés mondiaux ; l'évolution des taux de change des monnaies étrangères ; les risques liés aux procédures judiciaires de la société, aux demandes d'indemnisation des clients et à d'autres questions similaires ; les risques liés aux obligations de la société en vertu de sa facilité de crédit ; les risques liés aux grands contrats de la société ; les risques liés à la pandémie de COVID-19 et aux perturbations de la chaîne d'approvisionnement qui en découlent ; et d'autres facteurs décrits dans le présent document et dans les autres documents déposés par la société auprès de la Securities and Exchange Commission (Commission des valeurs mobilières). Nous n'assumons aucune obligation et n'avons pas l'intention de mettre à jour ces déclarations prévisionnelles ou de les adapter aux résultats réels ou à l'évolution de nos attentes.

Informations complémentaires et lieux d'accès

Comtech a déposé auprès de la Securities and Exchange Commission ("SEC") et envoyé par la poste aux actionnaires de la société une circulaire de sollicitation de procurations définitive, un document d'accompagnement et une lettre d'information. BLEU qui l'accompagne et d'autres documents pertinents en rapport avec l'assemblée annuelle des actionnaires de la société pour l'exercice 2021 (l'"assemblée annuelle de 2021"). LES ACTIONNAIRES DE LA SOCIÉTÉ SONT PRIÉS DE LIRE LA CIRCULAIRE DE SOLLICITATION DE PROCURATIONS, LA CARTE DE PROCURATION BLEU QUI L'ACCOMPAGNE ET TOUT AUTRE DOCUMENT DEVANT ÊTRE DÉPOSÉ AUPRÈS DE LA SEC DANS LE CADRE DE L'ASSEMBLÉE ANNUELLE 2021 DE LA SOCIÉTÉ OU INCORPORÉ PAR RÉFÉRENCE DANS LA CIRCULAIRE DE SOLLICITATION DE PROCURATIONS, CAR ILS CONTIENDRONT DES INFORMATIONS IMPORTANTES SUR L'ASSEMBLÉE ANNUELLE 2021 DE LA SOCIÉTÉ ET LES PARTIES QUI S'Y RAPPORTENT. Les actionnaires de la société peuvent obtenir une copie gratuite des documents déposés auprès de la SEC sur le site web de la SEC à l'adresse https://www.sec.gov ou sur le site web de la société à l'adresse www.ComtechCreates.com.

Participants à l'appel d'offres

La Société, ses administrateurs et certains de ses cadres dirigeants sont, et certains autres membres de la direction et employés de la Société peuvent être considérés comme des "participants" à la sollicitation de procurations auprès des actionnaires en rapport avec les questions à examiner lors de l'assemblée annuelle de 2021. Les informations concernant les intérêts directs et indirects, par la détention de titres ou autrement, dans la Société des personnes qui sont ou peuvent être, selon les règles de la SEC, considérées comme des participants à la sollicitation des actionnaires de la Société dans le cadre de l'Assemblée annuelle 2021 de la Société, sont présentées dans la circulaire de sollicitation de procurations définitive de la Société déposée dans le cadre de l'Assemblée annuelle 2021 de la Société et dans d'autres documents pertinents déposés auprès de la SEC. Vous trouverez également des informations sur les cadres dirigeants et les administrateurs de la société dans le rapport annuel de la société sur le formulaire 10-K pour l'exercice clos le 31 juillet 2021, ainsi que dans les autres documents déposés par la société et ces personnes auprès de la SEC.

PCMTL

¹ Source : Données de marché de Bloomberg au 29 octobre 2021. Les sociétés comparables sélectionnées sont des fournisseurs de solutions et de services de communication mondiaux ayant des clients commerciaux et gouvernementaux ; elles sont limitées aux entités dont la capitalisation boursière est inférieure à 10 milliards de dollars. Les sociétés comparables sélectionnées sont Elbit, Gilat, KVH Industries, ST Engineering et Viasat. Le rendement total pour les actionnaires suppose que les dividendes sont réinvestis au taux sans risque.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211206005305/en/

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