33 slides from Comtech Telecommunications's proxy contest presentation, Dec 1, 2021
Slide 1: The Case for Change at Comtech: Setting the Record Straight
THE CASE FOR CHANGE AT Setting the Record Straight Supplemental Investor Presentation Dated December 1, 2021 https://www.RestoreComtech.com
Slide 2: Legal Disclaimer
Legal Disclaimer THE MATERIALS CONTAINED HEREIN (THE “MATERIALS”) REPRESENT THE OPINIONS OF OUTERBRIDGE PARTNERS, LP AND THE OTHER PARTICIPANTS NAMED IN THIS PROXY SOLICITATION (COLLECTIVELY, “OUTERBRIDGE”) AND ARE BASED ON PUBLICLY AVAILABLE INFORMATION WITH RESPECT TO COMTECH TELECOMMUNICATIONS CO
Slide 3: Executive Summary: Setting The Record Straight on Comtech's Misrepresentations
Executive Summary: Setting The Record Straight on Comtech’s Misrepresentations ➢ Shareholders must act now to ensure a robust strategic review and minimize downside risk to shareholders from a flawed process. ➢ Comtech has failed to address CEO Fred Kornberg’s lost security clearance and related par
Slide 4: Outerbridge's Interests are Aligned with ALL Shareholders
Outerbridge’s Interests are Aligned with ALL Shareholders ➢ Outerbridge’s sole objective is to Outerbridge’s Positive Impact on Comtech and Shareholder Rights enhance value for ALL shareholders RESPONSIBLE FOR POSITIVE GOVERNANCE CREATED SHAREHOLDER VALUE ➢ This Proxy Contest is not about CHANGES O
Slide 5: Shareholders Must Act Now to Ensure a Robust Strategic Review and Minimize Downside Risk
Shareholders Must Act Now to Ensure a Robust Strategic Review and Minimize Downside Risk to Shareholders ➢ Comtech is at a critical juncture with respect to its business transformation, growth strategy, and, most importantly, review of the unsolicited Acacia offer (39% premium to Comtech’s unaffecte
Slide 6: The 2014 Strategic Review Destroyed Shareholder Value
The 2014 Strategic Review Destroyed Shareholder Value - The Long-Tenured Management and its Cherry-Picked Board Cannot be Trusted with the Current Strategic Review 300 CMTL Peer Median S&P 500 Nasdaq Telecom Index 250 167.8 200 150 134.5 100 50 94.6 0 -31.5 -50 -100 Source: FactSet, Data as of June
Slide 7: Outerbridge Nominee: Sidney Fuchs is the Right Choice for Comtech's Board
Outerbridge Nominee: Sidney Fuchs is the Right Choice for Comtech's Board Extensive M&A and Industry Experience ➢ Sid has sold two companies as a Board member and played a significant role in the diligence and negotiating phases: • Roam Secure, LLC ($50M in revenue); and • Geocent, LLC ($90M in reve
Slide 8: Setting the Record Straight on Sidney Fuchs
Setting the Record Straight on Sidney Fuchs Financial Expertise WHY EUTELSAT AMERICA DOES NOT REPRESENT A CONFLICT OF INTEREST ➢ As CEO of several companies, and with the CFO and his/her team as direct reports, Sid has been ultimately ➢ While Eutelstat America Corp. ("EAC") and Comtech are both part
Slide 9: Outerbridge Nominee: Wendi Carpenter is the Right Choice for Comtech's Board
Outerbridge Nominee: Wendi Carpenter is the Right Choice for Comtech's Board Strong Civilian Expertise Impeccable Military Credentials ➢ Technical background in warfighting technology development that involves ➢ As a former Navy Warfare Development Command, oversaw all U.S. Navy simulated semiconduc
Slide 10: Setting the Record Straight on Wendi Carpenter
Setting the Record Straight on Wendi Carpenter REALITY ➢ Wendi served on the Board of a startup credit card processing company, an LLC started by a U.S. Navy veteran, who felt that she could quickly Comtech’s Misleading Claims learn the business and help in a variety of ways. Eventually she determin
Slide 11: Outerbridge Ran a Thorough Process to Identify Qualified Independent Nominees
Outerbridge Ran a Thorough Process to Identify Qualified Independent Nominees The Outerbridge Nominees have the experience, skills and expertise needed to enhance shareholder value and restore accountability Outerbridge Nominees Comtech Nominees Key Aspects of ➢ Retained an independent director the
Slide 12: Comtech's Misrepresentations of Outerbridge Will Not Resonate with Investors
Comtech's Misrepresentations of Outerbridge Will Not Resonate with Investors REALITY ➢ These false statements appear to originate with Mr. Porcelain, who has never had any interest in having a productive dialogue with Outerbridge, a large shareholder. During an in-person meeting on July 22nd with Me
Slide 13: Comtech's Misrepresentations of Outerbridge Will Not Resonate with Investors (cont.)
Comtech's Misrepresentations of Outerbridge Will Not Resonate with Investors (cont.) REALITY ➢ Outerbridge initially introduced two highly qualified, independent candidates to resolve its concerns privately and outside of a costly and distracting public proxy contest, but the independent members of
Slide 14: Performance Misconceptions
Performance Misconceptions
Slide 15: Investors Should be Wary of Comtech's False Claims of Business Momentum
Investors Should be Wary of Comtech’s False Claims of Business Momentum in Light of the Ongoing Strategic Review Comtech wants shareholders to believe that the declining trend in revenue and Adj. EBITDA will suddenly reverse next year while REALITY pursuing the same failed strategy ➢ Comtech has tou
Slide 16: Comtech Failed to Manage Supply Chain Challenges, While Peers Reported Record Earnings
Comtech Failed to Manage Supply Chain Challenges, While Peers Reported Record Earnings What We Know… While Comtech claims that supply chain challenges are to blame for declines in its business, the Company's peers have navigated these issues much better and many reported record earnings in the most
Slide 17: Comtech's Representation of TSR is Highly Misleading
Comtech's Representation of TSR is Highly Misleading: Excludes Public Safety Peers and a 32% Decline in 1-yr Share Price Prior to the Start Date Comtech's 10-year Share Price (before impact of Covid) Comtech's TSR at the time of Fred 50.0 Fred Kornberg (CEO, Executive Kornberg's re-appointment as th
Slide 18: Outerbridge's Peer Group is More Representative of Comtech's Business
Outerbridge’s Peer Group is More Representative of Comtech’s Business ➢ Comtech failed to include any Public Safety comps despite claiming in investor conferences that the segment accounts for roughly 1/3 of aggregate revenue ➢ Axon, Motorola Solutions, Kratos, and Teledyne have successfully capital
Slide 19: Comtech Continues to Defend the Value destructive Gilat Transaction
Comtech Continues to Defend the Value destructive Gilat Transaction; Comtech's Share Price Fell 19% Upon Deal Announcement REALITY CMTL share price fell 19% at CMTL Share Price Gilat acquisition announcement ➢ Investors did not believe in the ‘strategic’ merits of the Gilat 45.00 transaction deal no
Slide 20: Flawed Capital Allocation Strategy: Zero Share Repurchases Since FY16
Flawed Capital Allocation Strategy: ZERO Share Repurchases Since FY16 and $700M of Shareholder Capital Destroyed on Failed Acquisitions and R&D +350 -704 1270 REALITY ➢ In September 2020, Comtech’s Board authorized a new +599 $100.0 million stock repurchase program, which replaced its prior program
Slide 21: Governance Misconceptions
Governance Misconceptions Outerbridge
Slide 22: Comtech Needs Only to Look to its CEO/Chair for Conflicts of Interest
Comtech Needs Only to Look to its CEO/Chair for Conflicts of Interest LOSS OF SECURITY CLEARANCE The company disclosed in 2012 that CEO/Chair Fred Kornberg had his security Comtech’s CEO/Chair RELATED PARTY Fred Kornberg clearance suspended as a TRANSACTIONS result of a grand jury investigation stem
Slide 23: Did the Loss of Mr. Kornberg's Security Clearance Hinder the Government Solutions Business?
Did the Loss of Mr. Kornberg's Security Clearance Hinder the Government Solutions Business? Bloomberg ➢ The suspension of Fred Kornberg’s security clearance occurred shortly after the 2010 loss of the $400 million Blue Force Tracking contract with the U.S. Government – yet the company never explaine
Slide 24: Comtech Failed to Disclose Michael Porcelain's Investment Advisory Business
Comtech Failed to Disclose Michael Porcelain’s Investment Advisory Business According to the The- Adviser.com website, CEO- About Us – Management . elect Michael Porcelain is The-Adviser.com was founded by: the Founder and has been • Michael D. Porcelain, CPA, MS, MBA a “professional money manager
Slide 25: Company's CEO Recruitment Process Appears to be Focused on Keeping Kornberg and Porcelain in Control
Like Most Critical Decisions at Comtech, the Company's CEO Recruitment Process Appears to be Focused on Keeping Kornberg and Porcelain in Control What We Know... ➢ In December 2014, Comtech announced the appointment of Dr. Stanton D. Sloane as the Company's next CEO and President. As Mr. Sloane had
Slide 26: Comtech Changed Proxy Disclosures Regarding Financial Expertise on the Board
Comtech Changed Proxy Disclosures Regarding Financial Expertise on the Board in an Apparent Response to the Proxy Contest REALITY Our Board of Directors has determined that each of ➢ In its FY20 proxy statement, Comtech acknowledged that Messrs. Paul and Waldman and Ms. Lesavoy qualifies as both Lar
Slide 27: Comtech's Flawed Board Refreshment: Added Lisa Lesavoy
Comtech’s Flawed Board "Refreshment": Added Lisa Lesavoy, Who Led a Company with Only 3 Employees and No Website After 31 Years in Business What capital allocation, M&A, or relevant industry experience did Lisa Lesavoy gain from her 31 years at Lesavoy Financial Perspectives– a business with 3 emplo
Slide 28: Comtech's Flawed Board Refreshment: Added Judy Chambers
Comtech’s Flawed Board "Refreshment": Added Judy Chambers Who Appears Grossly Underqualified to be a Comtech Director How is advising pension funds and charitable organizations on selecting investment managers at Meketa relevant to Judy Chambers Comtech’s Satellite, NG911, and Government business? N
Slide 29: Comtech Nominee Judy Chambers is the Wrong Choice to Protect Shareholder Interests
Comtech Nominee Judy Chambers is the Wrong Choice to Protect Shareholder Interests REFUSED TO MEANINGFULLY ENGAGE WITH OUTERBRIDGE ➢ Ms. Chambers refused to respond to Outerbridge’s multiple overtures until two days before the Nomination Deadline, after Outerbridge informed her it would be nominatin
Slide 30: Comtech Nominee Larry Waldman is the Wrong Choice to Protect Shareholder Interests
Comtech Nominee Larry Waldman is the Wrong Choice to Protect Shareholder Interests RESPONSIBLE FOR PROLONGED SHAREHOLDER VALUE DESTRUCTION ➢ Responsible for destroying $700M of shareholder value through failed growth and M&A strategy. ➢ Failed to hold management accountable for poor performance. ➢ I
Slide 31: Comtech's Flawed Board Refreshment: Added Mark Quinlan As Part of a Vote Buying Scheme
Comtech’s Flawed Board "Refreshment": Added Mark Quinlan As Part of a Vote Buying Scheme that added Duplicative Finance Experience to the Board Spok Holdings Share Price Performance What We Know... 18-June-2020: Spok 30-Aug-2021: Spok ➢ Similar to with Comtech, in June 2020, White Hat entered into a
Slide 32: Comtech's Vision: A Board Severely Lacking In Experience and Unable to Hold Management Accountable
Comtech's Vision: A Board Severely Lacking In Experience and Unable to Hold Management Accountable Two current and former Comtech CEOs on the Board Two out of seven directors will be non- independent (29%) CEO-elect Michael Porcelain moonlights as an Investment Advisor During a proxy contest
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