Comtech Sets the Record Straight Regarding Outerbridge’s Continued Misleading Claims

Outerbridge’s latest claims do not stand up to the facts; Exposes hedge fund’s misleading statements, material omissions, unqualified director nominees, and true agenda

Comtech’s Board has driven strong performance, transformative acquisition strategy, thoughtful Board refreshment, and access to critical new growth capital

Comtech strongly recommends stockholders vote “FOR” all of Comtech’s highly qualified and experienced director nominees on the BLUE proxy card

MELVILLE, N.Y. –
November 29, 2021 Comtech Telecommunications Corp. (NASDAQ: CMTL), a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies, today announced that it has filed supplemental investor information with the Securities and Exchange Commission (“SEC”) addressing factual inaccuracies and misleading statements Outerbridge Capital Management has made regarding Comtech’s performance, strategy, Board of Directors and management team. This supplemental information along with a full presentation by Comtech is available under the stockholder materials section of https://comtechcreates.com.

In response to Outerbridge’s continued false and misleading statements, Comtech notes:

  • Outerbridge greatly misrepresents the facts of Comtech’s performance, revealing an ongoing inability to understand Comtech’s business. The November 22, 2021 “analysis” that Outerbridge filed with the SEC uses a peer set on which no informed shareholder or analyst would rely. Outerbridge cites companies whose market capitalizations, businesses, end markets, and financial profiles differ so radically from Comtech as to render comparisons at best irrelevant, and at worst self-serving and misleading. Further, this analysis cherry picks dates so as to completely ignore the announcements of major new contract wins and governance enhancements that were well underway before Comtech ever heard of Outerbridge.
  • Outerbridge glosses over its deceptive revolving door of Board candidates. In criticizing Comtech’s vetting process, Outerbridge conveniently omits that it failed to permit its initial nominees to follow Comtech’s standard evaluation process; then changed its entire director nominee slate; and then again refused to permit its nominees to participate in standard Board-selection due diligence.
  • Outerbridge’s director nominees are unfit to serve on Comtech’s Board. Wendi Carpenter offers no industry, accounting, or M&A expertise. Ms. Carpenter sits on the Board of only one company, SkyWater Technology, whose share price fell 36% following disappointing third quarter earnings in which the company reported a net loss and its principal accounting officer resigned without explanation. Comtech also discovered material omissions from Ms. Carpenter’s resume that mask a history of poor oversight, including chairing a now defunct credit card processing company and forming three small businesses that have been administratively dissolved due to failure to file required annual reports and registrations. Sidney Fuchs currently serves as Chairman of the Board of Eutelsat North America, a major competitor to many of Comtech’s largest customers, creating a material conflict of interest that would significantly damage key customer relationships and negatively impact prospective business opportunities. His industry background is in services – not products or software – and he also possesses no accounting or audit experience. Mr. Fuchs resigned his only position as CEO and director of a public company, ATS Corporation, just a few days after assuming the CEO role.
  • Outerbridge appears to have no value creation plan beyond writing public letters riddled with inaccuracies and misleading, unsubstantiated claims; wasting our Board’s time with an ever-changing selection of director candidates; and actively trading in and out of Comtech’s stock over the past several months while holding a substantial portion of their “ownership” position in short-dated options.

In stark contrast to Outerbridge, Comtech is in the process of executing its real, forward-facing plans to create shareholder value. Armed with new oversight and new capital, Comtech is poised to capitalize on a generational tech-renewal cycle in its core satellite communications and next-generation 911 markets. The presentation highlights that Comtech has:

  • Delivered strong shareholder returns: Through October 29, 2021, Comtech has delivered five-year total shareholder returns of 126.7%, outperforming the S&P 600 which returned 99.7%, the NASDAQ Telecommunications Index which returned 87.5%, and the appropriate peer set who returned 36.7%. This five-year period includes major announcements made by Comtech: (i) the fiscal 2021 refreshment of the Board including the appointment of our second female director; (ii) Comtech’s plan to declassify the Board; (iii) the impact of COVID-19 on Comtech’s full fiscal 2021 results and fiscal 2022 guidance; (iv) the announcement of the completion of the Board’s multi-year CEO succession plan; and (v) major contract award announcements related to NG-911 contracts and a new multi-year contract for our next-generation broadband satellite technology that can result in potential future orders aggregating hundreds of millions of dollars. Despite the indisputable impact of COVID-19 disruptions on its business, Comtech’s share price has also rebounded 84% from pandemic lows.1
  • Executed a transformative acquisition strategy that is producing results: Comtech’s 2016 acquisition of TeleCommunication Systems, Inc. facilitated entry into the 911 public safety market, provided access to blue chip customers, and generated meaningful recurring revenues through multi-year contracts. In the same breath that they refer to Comtech’s 911 public safety business as its “crown jewel,” they criticize the disciplined and thoughtful M&A strategy that built this business. Outerbridge cannot have it both ways.
  • Refreshed its Board with highly capable directors: Since 2020, Comtech’s Board has accelerated a deliberate director refreshment process that was initiated in 2015, resulting in the appointment of four qualified new directors, the planned retirement of three longstanding directors, and declassification as part of its commitment to strong governance. Comtech’s two directors standing for election demonstrate the strong mix of skills, experience, and diverse perspectives on the Board. Larry Waldman’s 35-plus years of experience in auditing and internal controls provide our Board critical expertise in complex global accounting. Judy Chambers was appointed to our Board in August 2021 following a multi-month evaluation process, adding extensive experience interfacing with regulatory authorities as it relates to major infrastructure projects and addressing the interests and concerns of institutional investors.
  • Secured new capital to fund next phase of growth and empowered the right leader: New CEO Mike Porcelain has the operational and executional expertise necessary to move Comtech forward, as evidenced by his ability to drive key, long-term contract wins and secure a $100 million investment following months of discussions. The proceeds of this investment provide the capital necessary to fund Comtech’s next phase of growth, including additional capital investments to service new next-generation 911 contracts and a new large satellite technology contract as well as attractive M&A opportunities. Leading financial and legal advisors thoroughly assessed the terms of this investment, which provide for an adjustment to the conversion price representing a 7% premium. Further, the investment agreement contains no voting obligations with respect to the election of directors.

Comtech urges shareholders to support their Board by voting the BLUE proxy card today FOR Comtech’s two 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.

YOUR VOTE IS VERY IMPORTANT!

To ensure your shares are represented, please follow the easy instructions on the BLUE proxy card to vote by telephone, by internet, or by signing, dating and returning the BLUE proxy card in the postage-paid envelope provided. If you received this letter by email, you may also vote by pressing the BLUE “VOTE NOW” button in the accompanying email. Please simply disregard any White proxy card you may receive from Outerbridge.

In caso di domande o di necessità di assistenza per l'esercizio del diritto di voto sulle proprie azioni, si prega di contattare il proxy solicitor di Comtech, Innisfree M&A Incorporated:

Toll-Free: (877) 750-8198 (from the U.S. and Canada)

Or +1 (412) 232-3651 (from other locations)

Comtech’s definitive proxy materials and other materials regarding the Board’s recommendation for the Fiscal 2021 Annual Meeting of Stockholders can be found at www.comtechcreates.com.

Informazioni su Comtech

Comtech Telecommunications Corp. è un fornitore leader a livello mondiale di sistemi di emergenza 911 di nuova generazione e di tecnologie di comunicazione wireless sicure per clienti commerciali e governativi in tutto il mondo. Con sede a Melville, New York, e con la passione per il successo dei clienti, Comtech progetta, produce e commercializza soluzioni wireless avanzate e sicure. Per ulteriori informazioni, visitare il sito www.comtechtel.com.

Dichiarazioni previsionali

Alcune informazioni contenute nel presente comunicato stampa contengono dichiarazioni di natura previsionale che comportano rischi e incertezze significativi, ad esempio riguardo alla traiettoria della nostra attività, ai ricavi e alle vendite futuri, alla strategia di acquisizione, ai cambiamenti a livello di gestione e di governance e alla crescita. I risultati effettivi potrebbero differire materialmente da tali informazioni previsionali. I rischi e le incertezze che potrebbero influire su queste dichiarazioni previsionali includono: la possibilità che le sinergie e i benefici attesi dalle recenti acquisizioni non si realizzino pienamente o non si realizzino nei tempi previsti; il rischio che le attività acquisite non si integrino con successo nell'Azienda; la possibilità di interruzioni dovute alle recenti acquisizioni, che rendono più difficile mantenere i rapporti commerciali e operativi o trattenere il personale chiave; il rischio che l'Azienda non riesca a implementare un cambiamento tattico nel suo segmento Government Solutions, abbandonando le gare d'appalto per i grandi contratti di servizi di commodity a favore di contratti per i suoi prodotti di nicchia con margini più elevati; la natura e la tempistica della ricezione di ordini nuovi o esistenti e le prestazioni dell'Azienda, che possono causare fluttuazioni significative nelle vendite nette e nei risultati operativi; la tempistica e il finanziamento dei contratti governativi; rischi associati alle vendite internazionali, ai rapidi cambiamenti tecnologici, all'evoluzione degli standard industriali, agli annunci e ai miglioramenti di nuovi prodotti, al cambiamento delle richieste dei clienti o delle strategie di approvvigionamento, alle variazioni delle condizioni economiche e politiche prevalenti, alle variazioni del prezzo del petrolio nei mercati globali e alle variazioni dei tassi di cambio delle valute estere; rischi associati ai procedimenti legali della Società, alle richieste di indennizzo da parte dei clienti e ad altre questioni simili; rischi associati agli obblighi della Società ai sensi della Credit Facility; rischi associati ai contratti di grandi dimensioni della Società; rischi associati alla pandemia COVID-19 e alle relative interruzioni della catena di approvvigionamento; e altri fattori descritti in questo e negli altri documenti presentati dalla Società alla Securities and Exchange Commission. Non ci assumiamo alcun obbligo e non intendiamo aggiornare queste dichiarazioni previsionali o conformarle ai risultati effettivi o ai cambiamenti delle nostre aspettative.

Ulteriori informazioni e dove trovarle

Comtech has filed with the Securities and Exchange Commission (“SEC”) and mailed to the Company’s stockholders a definitive proxy statement, an accompanying BLUE proxy card and other relevant documents in connection with the Company’s Fiscal 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”). THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT, THE ACCOMPANYING BLUE PROXY CARD AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE COMPANY’S 2021 ANNUAL MEETING OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY’S 2021 ANNUAL MEETING AND THE PARTIES RELATED THERETO. The Company’s stockholders may obtain a free copy of documents filed with the SEC at the SEC’s website at https://www.sec.gov or the Company’s website at www.comtechcreates.com.

Partecipanti alla Sollecitazione

La Società, i suoi amministratori e alcuni dei suoi funzionari esecutivi sono, e alcuni altri membri del management e dipendenti della Società possono essere considerati "partecipanti" alla sollecitazione di deleghe da parte degli azionisti in relazione alle questioni da considerare all'Assemblea annuale del 2021. Le informazioni relative alle partecipazioni dirette e indirette, tramite titoli o altro, nella Società delle persone che sono o possono essere, secondo le regole della SEC, considerate partecipanti alla sollecitazione degli azionisti della Società in relazione all'Assemblea annuale della Società del 2021 sono riportate nella dichiarazione di delega definitiva della Società depositata in relazione all'Assemblea annuale della Società del 2021 e in altri documenti pertinenti depositati presso la SEC. È inoltre possibile trovare informazioni sui funzionari e direttori esecutivi della Società nella Relazione annuale della Società sul Modulo 10-K per l'anno fiscale conclusosi il 31 luglio 2021 e negli altri documenti depositati dalla Società e da tali persone presso la SEC.

PCMTL


1 Source: Bloomberg market data as of October 29, 2021. Peers selected are global communications solutions and services providers with both commercial and government customers; limited to entities with market capitalization under $10 billion. Selected peers consist of Elbit, Gilat, KVH Industries, ST Engineering, and Viasat. Total stockholder returns assume dividends are reinvested at the risk free rate.

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