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.

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.

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

Media Contact

Kekst CNC

[email protected]

(212) 521-4800

Contatto con gli investitori

Relazioni con gli investitori Comtech

[email protected]

(631) 962-7005