54 slides from Comtech Telecommunications's proxy contest presentation, Nov 23, 2021
Slide 1: Executing on Our Strategic Plan to Deliver Stockholder Value
Slide 2: The Path Forward
11/23/2021 1:02:17 PM 2 The Path Forward I. Our Strategy to Drive Stockholder Value II. Comtech’s Strong Track Record and Trajectory III. The White Hat and Magnetar Strategic Investment and Receipt of Unsolicited Offer IV. Comtech’s History of Strong Corporate Governance and Management V. Election o
Slide 3: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward - Looking Statements Certain information in this presentation contains forward - looking statements, including, but not limited to, information relating to Comtech’s future performance and financial condition, plans and objectives of Comtech’s management and Co
Slide 4: Use of Non-GAAP Financial Measures
Use of Non - GAAP Financial Measures In order to provide investors with additional information regarding the Company’s financial results, this presentation contains "Non - GAAP financial measures" under the rules of the SEC . The Company’s Adjusted EBITDA is a Non - GAAP measure that represents earn
Slide 5: Our Strategy to Drive Stockholder Value
11/23/2021 1:02:17 PM 5 Our Strategy to Drive Stockholder Value Comtech has a clearly - articulated strategy to drive stockholder value
Slide 6: Comtech is creating value for all stockholders
6 Comtech is creating value for all stockholders: Leading global provider of next - gen 911 (NG911) emergency systems and secure wireless communications technologies Uniquely positioned following the 2010 loss of a $400 million BFT program and a multi - year portfolio transformation to capitaliz
Slide 7: Our Strategy to Drive Value: Positive Trajectory in Wireless Technology Markets
7 Our Strategy to Drive Value: Take Advantage of Positive Trajectory in Our Wireless Technology Markets Positive Trajectory in Our Wireless Technology Markets Comtech is participating in two end markets, each of which is undergoing structural changes that will drive multi - year investment cycles
Slide 8: Our Strategy to Drive Value: Revitalized Board and Management
8 Our Strategy to Drive Value: Revitalized Board and Management Revitalized Board and Management After the 2010 loss of a BFT program worth $400 million and a subsequent 5 - year period of revenue declines, new independent Board members were added (Larry Waldman in 2015 and Yacov Shamash in 2016)
Slide 9: Our Strategy to Drive Value: Protect the Long-Term Interests of Stockholders
9 Our Strategy to Drive Value: Protect the Long - Term Interests of Stockholders Protect the Long - Term Interests of Stockholders While we have been focused on growing our business, dealing with the challenges of COVID - 19 and global supply chain issues, making key leadership changes, refreshing
Slide 10: Comtech Has Outperformed Over Both 1 and 5 Years
115.9 % 23.3 % 91.5 % 75.4 % 60% 100% 140% 180% 220% 260% 300% 340% 380% 420% 460% Oct-2016 Aug-2017 Jun-2018 Apr-2019 Feb-2020 Dec-2020 Oct-2021 Indexed Price Comtech Telecommunications Selected Peers¹ S&P 600 Nasdaq Telecom Index 10 Despite Volatility, Comtech Has Outperformed Over Both 1 and 5 Ye
Slide 11: Comtech's Strong Record and Trajectory
11/23/2021 1:02:17 PM 11 Comtech’s Strong Record and Trajectory Comtech has executed on a carefully considered strategy to enhance its position as a secure wireless technology leader and is well - positioned to deliver continued growth and profitability
Slide 12: Loss of the BFT Contract Caused the Board to Develop a New Strategy
$ 586M $ 778M $ 612M $ 425M $ 320M $ 347M $ 307M $ 411M $ 550M $ 571M $ 672M FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 $ 114M $ 145M $ 135M $ 76M $ 52M $ 61M $ 52M $ 48M $ 71M $ 78M $ 93M FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY
Slide 13: Comtech Has Transformed Itself Into a Secure Wireless Technology Leader
Satellite Ground Station Equipment Market Comtech Has Transformed Itself Into a Secure Wireless Technology Leader 13 SATCOM communications equipment market expected to grow from under $5 billion in 2020 to close to $9 billion by 2029 2 #1 Provider of Single Channel per Carrier modems Leading p
Slide 14: Well-Positioned to Exploit an Inflection Point in the SATCOM Industry
We Are Well - Positioned to Exploit an Inflection Point in the SATCOM Industry . Satellite Cellular for 3G/4G/5G “One - Stop - Shop” Approach Allows Comtech To Maximize Market Growth Opportunities Complete Solutions Portfolio Deep, Global Market Access R&D and Distribution Scale Government & Defense
Slide 15: Recently Won Multi-Year Contract Potentially Worth Hundreds of Millions
We Recently Won A Multi - Year Contract Potentially Worth “Hundreds of Millions” of Dollars for Comtech’s Next - Gen Technology Rapidly Growing Connectivity Demand Thousands of new LEO, MEO, and GEO satellites are expected to be launched over the next few years Satellite constellations will prov
Slide 16: Poised to Benefit From Increasing Spending in Next Generation 911
We Are Poised to Benefit From Increasing Spending in Next Generation 911 800+ PSAPs 60M+ Pop. 9 Statewide 6 R egional 5,600+ PSAPs 220M+ Subs 4,600+ PSAPs 5 0M+ Subs Supporting Next Generation Upgrades and 911 End - to - End Solutions Wireless 911 Solutions NG911 Solutions VOIP 911 Solutions “Comtec
Slide 17: Targeted M&A Strategy Has Been Enormously Successful
Pre - TCS Acquisition (FY2015) Our Targeted M&A Strategy to Enhance Our Wireless Technology Leadership Has Been Enormously Successful 17 Comtech has a clear strategy focused on strengthening its industry - leading position within next generation 911 services and continuing to advance its best - in
Slide 18: Cancelling the Gilat Acquisition Was the Right Thing to Do
The Difficult Decision to Cancel the Strategic Gilat Acquisition Was the Right Thing to Do for Stockholders x Designed to create a global leader with expansive footprint — Complement Comtech’s global market footprint — Substantially enhance access to key markets — Enable Comtech to offer customers a
Slide 19: End-Markets Hit Hard by COVID-19 and Supply Chain Issues
$ 411M $ 550M $ 571M $ 672M $ 617M $ 582M $ 590M FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Guidance $ 48M $ 71M $ 78M $ 93M $ 78M $ 77M $ 73M FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Guidance 19 Our End - Markets Were Hit Hard by COVID - 19, and Supply Chain Issues Conti
Slide 20: Comtech Has Maintained Significant Momentum Through COVID
Even through COVID, Comtech Has Maintained Significant Momentum, Establishing its Leadership Position in Secure Wireless Technology 20 FY 2021 Earnings Highlights ~$582M FY2021 Revenue ~$77M FY2021 Adjusted EBITDA >$1.1Bn Backlog and Contracts >$200M NG911 Contract Wins in 2021 FY 2021 FY 2022 Comte
Slide 21: Long History of Returning Capital to Stockholders
21 Comtech Has a Long History of Returning Capital to Stockholders x Comtech is committed to returning capital to stockholders and is in line with key benchmarks x Management’s track record of execution has positioned Comtech to retain high dividend payout ratio historically, relative to peers x 10
Slide 22: Comtech's Go-Forward Strategy to Create Value
State and local 911 agencies have need for cyber - training / preventing and satellite back - up capabilities Leverage our satellite relationships and further expand international penetration of our public safety Trusted Location Products Increase our revenue base to the U.S. military which ha
Slide 23: Strong Support for Comtech's Strategy From Research Analysts
Strong Support for and Recognition of Comtech’s Strategy From Research Analysts 23 The Sell - Side is Bullish on Our Strategic Plan and Execution “ CMTL posted a solid 4Q21 despite supply chain issues and Covid . Book:bill was over 1 . CMTL won $200 million in NG911 deals in FY21...Management noted
Slide 24: The White Hat and Magnetar Strategic Investment and Receipt of Unsolicited Offer
11/23/2021 1:02:17 PM 24 The White Hat and Magnetar Strategic Investment and Receipt of Unsolicited Offer Comtech’s Board always evaluates opportunities to maximize value for the benefit of all stockholders
Slide 25: White Hat and Magnetar's Investment Validates the Strategy
White Hat and Magnetar’s Investment Validates Management and the Board’s Strategy 25 x White Hat was a long - term common shareholder x Investment to accelerate growth with clearly defined use of proceeds x White Hat has a proven track record of creating value for technology businesses x White Hat r
Slide 26: Investment Provides Stockholder-Friendly Optionality
26 Investment Provides Stockholder - Friendly Optionality Intensely Negotiated Investment Designed to Benefit All Stockholders Capital Needed to Accelerate Growth The proceeds will finance key near - term growth and profitability initiatives: — Complete build out of technology centers and advance
Slide 27: Why Did Comtech Do the $100 Million Investment Now?
Why Did Comtech Do the White Hat and Magnetar $100 Million Investment Now? 27 New Next - Gen 911 contracts require more capital investments New large satellite contract for hundreds of millions of equipment may require more investment Attractive M&A opportunities COVID 19 still lingering and
Slide 28: Board Evaluating Acacia's Unsolicited Proposal
Our Board is committed to a fair and thoughtful process 28 Our Process - Oriented Board Continues to Thoughtfully Evaluate Acacia’s Unsolicited Proposal We have engaged constructively with Acacia, including meeting with their management, and will continue to do so as is appropriate Our Special Commi
Slide 29: Comtech's History of Strong Corporate Governance and Management
11/23/2021 1:02:17 PM 29 Comtech’s History of Strong Corporate Governance and Management Comtech’s refreshed Board and new executive leadership have the skills and experience to drive superior stockholder value
Slide 30: Board Has Taken Decisive Actions to Drive Value
Comtech’s Board Has Taken Decisive Actions to Drive Value — Announced the retirement of 3 longstanding directors — Addition of 2 diverse and highly qualified independent directors in the past two years — Addition of Mike Porcelain and Mark Quinlan, directors with deep industry expertise, by January
Slide 31: Comtech Has Significantly Refreshed Its Board of Directors
Mark Quinlan Incoming Independent Director Fred Kornberg Chairman & CEO Larry Waldman Independent Director 2018 Board 2022 Board Enhanced # of Directors 6 7 P Average Age 78 years 64 years P Avg. Tenure of Independent Directors 10 years 3 years P % Racially / Ethnically Diverse - % 14% P % Women - %
Slide 32: Recent Director Additions Resulted From Careful Assessment of Skills
32 Recent Director Additions Resulted From Board’s Careful Assessment of the Skills and Experience Required to Oversee Implementation of the Strategic Plan Each director went through a months - long, comprehensive vetting process to assess their skills and qualifications Judy Chambers Independent Di
Slide 33: Judy Chambers: Experience, Perspective, Commitment
33 Judy Chambers: Experience, Perspective, Commitment Outerbridge Nominees Compare Poorly to the Directors They Seek to Replace Judy Chambers Joined Aug - 2021 Nominating & Governance Comm. Chair High Quality Resume High Quality Candidate Significant Positive Impact to Comtech’s Board & Strategy M
Slide 34: Larry Waldman: Independence, Accountability, Stewardship
34 Larry Waldman: Independence, Accountability, Stewardship Outerbridge Nominees Compare Poorly to the Directors They Seek to Replace Larry Waldman Joined Aug - 2015 Lead Independent Dir. Audit Comm. Chair High Quality Resume High Quality Candidate Significant Positive Impact to Comtech’s Board & St
Slide 35: A Robust Board with a Diversity of Skills and Experience
Age Executive 911 Industry Satellite Industry Technology Financial Accounting /Audit Legal / Regulatory HR / Comp Risk Mgmt. Ops Corp Governance Strategic Planning M&A Judy Chambers 50 Fred Kornberg 85 Lisa Lesavoy 67 Mike Porcelain 52 Mark Quinlan 49 Yacov Shamash 71 Larry Waldman 75 35 A Robust Bo
Slide 36: Board Has Completed a Thoughtful CEO Succession Plan
36 Comtech’s Board Has Completed a Thoughtful CEO Succession Plan Initiated in 2018 Mike is a seasoned executive who has played an integral role in the development and execution of Comtech’s strategy His exceptional management skills, technical acumen, and understanding of our business markets a
Slide 37: Pay-for-Performance Culture Holds Management Accountable
37 The Board Has Emphasized a Pay - for - Performance Culture That Holds Management Accountable, and Management is Fully Aligned with Shareholders Performance - based target total pay opportunity based on pre - established goals Total direct compensation targets for each named executive officer (N
Slide 38: Election of Outerbridge Nominees Not In Stockholders' Best Interests
11/23/2021 1:02:17 PM 38 Election of Outerbridge Nominees Not In Stockholders’ Best Interests Outerbridge’s candidates lack the relevant skills and experiences to oversee Comtech’s strategic plan
Slide 39: Outerbridge Is Taking Advantage of COVID-19
COVID selloff $ 10 $ 15 $ 20 $ 25 $ 30 $ 35 $ 40 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 39 Outerbridge Is Taking Advantage of COVID - 19 Many Recent Value - Enhancing Initiatives Well Underway Prior to Outerbridge’s Campaign Comtech’s Board refreshment plan has been underway for s
Slide 40: Outerbridge's Interests Are Not Aligned with Other Stockholders
40 Outerbridge’s Interests Are Not Aligned with Those of Other Stockholders Outerbridge’s claim of 4.9% beneficial ownership masks an actual ownership and trading history that suggests its interests are misaligned with those of other stockholders Outerbridge’s beneficial ownership of slightly be
Slide 41: Outerbridge's Campaign is Opportunistic, Misleading, and Self-Serving
41 Outerbridge’s Campaign is Opportunistic, Misleading, and Self - Serving Erratic Behavior Inadequate Candidates Baseless Attacks and Criticisms Lacks Value - Creating Plan and is Focused on Its Reputation No earnest attempt to engage Comtech prior to publishing initial public letter Publicly n
Slide 42: What Does Outerbridge Want?
42 What Does Outerbridge Want? Create Public Reputation as an Activist Since the beginning, Outerbridge has made it clear that it is burnishing its own reputation Made clear in an early conversation with management that it was putting its “stake in the ground” with this engagement In October 2
Slide 43: Outerbridge's Behavior Has Been Erratic and Candidates Have Red Flags
43 Outerbridge’s Behavior Has Been Erratic and Its Candidates’ Backgrounds Are Full of Red Flags June 2021 Outerbridge made no earnest attempt to engage with the Company prior to publishing its first public letter August 2021 September 2021 While the Board was reviewing these two candidates, Out
Slide 44: Wendi Carpenter is Unqualified to Serve as a Comtech Director
44 Wendi Carpenter is Unqualified to Serve as a Comtech Director No Recent, Relevant Industry Experience Since 2012, has provided strategic planning, organizational transformation, risk assessment, human capital, and corporate governance consulting services via her Gold Star Strategies None of t
Slide 45: Wendi Carpenter is Unqualified to Serve as a Comtech Director (Cont'd)
45 Wendi Carpenter is Unqualified to Serve as a Comtech Director (Cont’d) Limited Public Director Experience Outerbridge has publicly attacked Judy Chambers’ lack of prior public board experience while failing to acknowledge Carpenter’s track record at SkyWater Technology — Carpenter has only 7 mo
Slide 46: Sidney Fuchs is Unqualified to Serve as a Comtech Director
46 Sidney Fuchs is Unqualified to Serve as a Comtech Director Materially Conflicted Role as Chairman of Eutelsat America Corp. would present a material conflict of interest given the company competes with several key Comtech customers Limited Public CEO and Director Experience Inability to Commit
Slide 47: Sidney Fuchs' Election Would Present a Material Conflict of Interest
47 Sidney Fuchs’ Election Would Present a Material Conflict of Interest Sidney Fuchs is Chairman of the Board of Eutelsat North America , a subsidiary of a direct, major competitor to many of Comtech’s largest new and existing customers. These customers regularly provide to Comtech highly - sensit
Slide 48: Outerbridge's False and Misleading Claims
48 Outerbridge’s False and Misleading Claims Source: Company filings and Bloomberg as of 29 - Oct - 2021 1 Selected Peers include Elbit , Gilat , KVH Industries, ST Engineering, and Viasat . Outerbridge’s False/Misleading Claims The Reality Share Price Performance “[S]hares are little changed from
Slide 49: Outerbridge's False and Misleading Claims: Board and Management
49 Outerbridge’s False/Misleading Claims The Reality Board and Management “Board’s lack of independence and relevant industry expertise“ “Board did not convey an appropriate succession plan” “[S] hareholders should now question the Board’s conduct as fiduciaries in having chosen to name Mr. Po
Slide 50: Comtech Has Consistently Engaged in Good Faith
50 Comtech Has Consistently Engaged in Good Faith Comtech welcomes engagement with all stockholders We have met with Outerbridge employees, candidates, and affiliates on more than a dozen occasions since June 2021, despite Outerbridge’s inability to provide any original ideas or plan to drive st
Slide 51: Vote Comtech BLUE
11/23/2021 1:02:18 PM 51 Vote Comtech BLUE
Slide 52: Comtech is creating value for all stockholders
52 Comtech is creating value for all stockholders: Leading global provider of next - gen 911 (NG911) emergency systems and secure wireless communications technologies Uniquely positioned following the 2010 loss of a $400 million BFT program and a multi - year portfolio transformation to capitali
Slide 53: Vote Comtech BLUE: Ensure Qualified Board and Management
Ensure Board and Management Are Qualified to Oversee Comtech’s Strategic Direction Utilize Recent Strategic Investment to Accelerate Enhanced Growth and Profitability Prospects Continue to Engage in Constructive Conversations with All Stockholders Continue to Explore All Paths to Driving Stockholder
Slide 54: About Comtech
About Comtech Comtech Telecommunications Corp. is a leading global provider of next-generation 911 emergency systems and secure wireless communication technologies to commercial and government customers around the world. Headquartered in Melville, New York and with a passion for customer success, Co