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.

컴텍 소개

는 전 세계 상업 및 정부 고객에게 차세대 911 응급 시스템과 보안 무선 통신 기술을 제공하는 선도적인 글로벌 기업입니다. 뉴욕주 멜빌에 본사를 두고 있으며 고객 성공을 위한 열정으로 첨단 보안 무선 솔루션을 설계, 생산 및 판매합니다. 자세한 정보는 www.comtechtel.com 에서 확인하세요.

미래 예측 진술

이 보도자료의 특정 정보에는 당사의 사업 궤적, 미래 수익 및 판매, 인수 전략, 경영 및 지배구조 변화, 성장 등 본질적으로 미래예측진술이며 특정 중대한 위험과 불확실성을 수반하는 진술이 포함되어 있습니다. 실제 결과는 이러한 미래예측 정보와 크게 다를 수 있습니다. 이러한 미래예측진술에 영향을 미칠 수 있는 위험과 불확실성은 다음과 같습니다: 최근 인수로 인해 예상되는 시너지 효과와 혜택이 완전히 실현되지 않거나 예상 기간 내에 실현되지 않을 가능성; 인수한 사업체가 당사와 성공적으로 통합되지 않을 위험; 최근 인수로 인해 비즈니스 및 운영 관계를 유지하거나 핵심 인력을 유지하기가 더 어려워질 수 있는 혼란 가능성; 회사가 정부 솔루션 부문에서 대형 상품 서비스 계약 입찰에서 벗어나 마진이 높은 틈새 제품 계약을 추구하는 방향으로의 전술적 전환을 실행하는 데 실패할 위험; 순매출 및 운영 실적에 상당한 변동을 일으킬 수 있는 신규 또는 기존 주문의 성격과 수령 시기 및 회사의 실적; 정부 계약의 시기 및 자금 조달; 장기 계약의 총 이익 조정, 해외 판매와 관련된 위험, 급격한 기술 변화, 진화하는 산업 표준, 신제품 발표 및 개선, 고객 요구 및 조달 전략의 변화, 일반적인 경제 및 정치 상황의 변화, 글로벌 시장에서의 유가 변화, 외화 환율의 변화; 회사의 법적 소송, 고객의 배상 청구 및 기타 유사한 문제와 관련된 위험, 신용 시설에 따른 회사의 의무와 관련된 위험, 회사의 대규모 계약과 관련된 위험, 코로나19 팬데믹 및 관련 공급망 중단과 관련된 위험, 기타 이 문서 및 회사가 증권거래위원회에 제출한 기타 서류에 기술된 기타 요인. 당사는 이러한 미래예측진술을 업데이트하거나 실제 결과 또는 기대치의 변경에 부합하도록 업데이트할 의무가 없으며 그럴 의도가 없습니다.

추가 정보 및 위치

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.

모집 참여자

회사, 이사 및 일부 임원은 2021년 연례 회의에서 고려할 사항과 관련하여 주주로부터 위임장 권유에 "참여자"로 간주될 수 있으며, 기타 회사의 경영진 및 직원도 "참여자"로 간주될 수 있습니다. 미국 증권거래위원회(SEC) 규정에 따라 2021년 연례 주주총회와 관련하여 회사 주주 위임장 권유 참여자로 간주되는 자의 회사에 대한 주식 보유 또는 기타 직간접적 이해관계에 관한 정보는 2021년 연례 주주총회와 관련하여 제출된 회사의 최종 위임장 설명서 및 SEC에 제출된 기타 관련 문서에 명시되어 있습니다. 또한 회사의 임원 및 이사에 대한 정보는 2021년 7월 31일에 마감된 회계연도에 대한 10-K 양식의 회사 연례 보고서, 회사 및 해당 인물이 SEC에 제출한 기타 서류에서 확인할 수 있습니다.

PCMTL

¹ 출처: 2021년 10월 29일 기준 블룸버그 시장 데이터. 선정된 동종업체는 상업 및 정부 고객을 모두 보유한 글로벌 통신 솔루션 및 서비스 제공업체로, 시가총액이 100억 달러 미만인 기업으로 제한됩니다. 선정된 동종업체는 Elbit, Gilat, KVH Industries, ST Engineering, Viasat입니다. 총 주주 수익률은 배당금이 무위험 이자율로 재투자된다고 가정합니다.

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

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