Comtech Comments on ISS Report

MELVILLE, N.Y. –
December 7, 2021– Comtech Telecommunications Corp. (NASDAQ: CMTL), a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies, today issued a statement in response to a report by Institutional Shareholder Services (“ISS”) regarding the election of directors to Comtech’s Board of Directors at the Company’s upcoming 2021 Annual Meeting of Stockholders:

ISS correctly recognizes the transformative actions Comtech’s Board and management have taken to strengthen corporate governance and strategically reposition the company to capitalize on secular growth opportunities. These actions include executing a multi-year Board refreshment process, completing a leadership succession plan, and developing an industry-leading portfolio of products and services in rapidly growing core markets. ISS also noted the strength of our incoming CEO’s knowledge of the industry and that the Board’s leadership change has put the company on a better trajectory poised to take advantage of sector tailwinds.

Where ISS misses the mark, however, is in its failure to attribute Comtech’s recent success to these critical actions, which Comtech’s current Board and management team have been implementing for the past five years. Over this period, Comtech has created clear value for shareholders, delivering 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 By contrast, Outerbridge’s only proven track record is trading its common stock and many short-term stock options in Comtech and Barnes & Noble Education at prices favorable to itself while creating volatility for long-term shareholders.

We believe ISS gravely underestimates the damage that would be done if Sidney Fuchs were to join the Comtech Board. ISS mistakenly dismisses Fuchs’ material conflict of interest as Chairman of Eutelsat America Corp. when several of Comtech’s largest customers have already voiced concerns about his potential appointment. While ISS suggests that Mr. Fuchs could recuse himself, we do not see how that could work when customer considerations are foundational to every strategic decision the Board makes, including investments in organic growth opportunities and M&A. In our view, to the extent Mr. Fuchs would have to recuse himself or would be conflicted from participating in committee or board meetings, it would likely be equivalent to his not serving on the Board at all.

A more comprehensive analysis of the candidates’ qualifications demonstrates that Mr. Fuchs lacks the skills and expertise to add incremental value for shareholders – and would indeed be value-destructive. We note that ISS chose not to support Outerbridge candidate Wendi Carpenter in part due to her lack of experience that is relevant to Comtech’s business.

Further, ISS fails to appreciate the importance of the $100 million strategic growth investment that Comtech secured from current shareholder White Hat Capital Partners, LP and Magnetar Capital LLC to accelerating our value creation strategy. ISS is incorrect about our borrowing capacity under our existing credit facility. Based on Comtech’s existing $200 million of debt, its $30 million of planned capital expenditures, its ongoing annual dividend program, its publicly announced fiscal 2022 guidance, and existing covenants, Comtech would not be able to make a request for a single dollar of incremental borrowing under the $250 million accordion feature. In light of this, we approached our key lending partners and they advised us to raise capital before seeking to obtain necessary additional borrowings.

This investment more than doubles our accessible capital to invest in a generational technology renewal cycle across core markets. It also offers us important financial flexibility and liquidity as we continue to navigate the impacts of COVID-19 and supply chain issues.

We urge shareholders to consider that electing any of Outerbridge’s nominees will introduce significant risk to the Company’s strategic direction. Outerbridge has nominated these candidates with no clear plan to enhance shareholder value but has made no secret of its self-serving objectives and has been willing to use blatant misinformation, seemingly for the purpose of bolstering its reputation as an activist and aiding its fundraising efforts. The underlying impact of voting for any of Outerbridge’s red-flag candidates is clear: a hedge fund with no experience in Comtech’s industry or understanding of our business will advocate for a near-term sale or announcement of a strategic alternatives process, tactics that would benefit Outerbridge’s trading strategy by allowing it to turn a quick profit on its near-term options holdings.

By comparison, both of Comtech’s nominees on the BLUE proxy card, Larry Waldman and Judy Chambers, have the experience, skills, and qualifications necessary to continue overseeing execution of the Company’s long-term strategic plan and creating shareholder value.

• Larry Waldman has been a critical independent voice in driving the Company’s successful transformation over the last six years. He has helped oversee the Company’s acquisition strategy (including building the NextGen 911 portfolio that Outerbridge asserts is the “crown jewel” of the company), Board refreshment, and leadership succession plan, among other value-enhancing initiatives undertaken over a number of years. Under his stewardship, the Company has generated total shareholder returns of over 120% over the last five years², and the Company is on significantly stronger footing with significant recurring revenues and a robust new business pipeline.

• Judy Chambers has already overseen significant corporate governance enhancements since joining the Board in August 2021 – including a plan for declassification, the completion of our leadership succession, and the appointment of two incoming directors with extensive industry experience. Her financial and M&A expertise, track record navigating infrastructure projects with public authorities, and demonstrated commitment to ESG will play an indispensable role in our value creation strategy moving forward.

Now is not the time to disrupt Comtech’s strong forward momentum and thoughtful value creation plan by supporting Outerbridge’s unqualified nominees and depriving our Board of critical skills and experience to achieve long-term growth.

Comtech reminds shareholders that their votes are extremely important, no matter how many or how few shares they own. Comtech strongly recommends that shareholders elect Comtech’s highly qualified director nominees, Judy Chambers and Larry Waldman, by voting the BLUE proxy card today.

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.

² Source: Bloomberg market data as of October 29, 2021.

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