Comtech Telecommunications Corp. · NASDAQ:CMTL

Comtech Telecommunications — Q3 2022 Earnings Presentation

31 slides from Comtech Telecommunications's earnings presentation, Jun 9, 2022

  1. Slide 1: Shareholder Presentation Q3 Fiscal Year 2022

    Shareholder Presentation Q3 Fiscal Year 2022 This presentation reflects information as of June 9, 2022 This presentation reflects information as of June 9, 2022

  2. Slide 2: Content

    Content 1. Introduction 2. About Us and Independent Market Studies 3. Revenue and Adjusted EBITDA Trends 4. Additional Financial Data 5. Reconciliation of GAAP to Non-GAAP Financial Measures 2

  3. Slide 3: Forward Looking Statements; Use of Non-GAAP Financial Measures

    Forward Looking Statements Certain information in this presentation contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements are based on current expectations, estimates, forecasts, and

  4. Slide 4: Creating Value For All Shareholders

    Creating Value For All Shareholders We Deliver the Most Important Calls You Will Ever Have to Make NextGen 911 Public Safety + Satellite Ground Station Equipment Market expected to grow approximately Market expected to grow nearly 2x from 2x from 2020 to 2026, reaching $1.1B(1) 2020 to 2029, reachin

  5. Slide 5: Comtech Has Transformed Itself Into a Secure Wireless Technology Leader

    Comtech Has Transformed Itself Into a Secure Wireless Technology Leader We keep communities safe and connect the unconnected. As a leading provider of next-generation 911 Our satellite network infrastructure helps bring emergency systems in the U.S., we deliver the wireless connectivity to underserv

  6. Slide 6: Comtech is Poised to Benefit From Increased Spending in NG-911

    Comtech is Poised to Benefit From Increased Spending in NG-911 Supporting Next Generation (“NG”) Upgrades NG911 Solutions and 911 End-to-End Solutions 800+ PSAPs 60M+ Pop. 9 Statewide 6 Regional Wireless 911 Solutions 5,600+ PSAPs 220M+ Subs VOIP 911 Solutions 4,600+ PSAPs 50M+ Subs Incident  Call

  7. Slide 7: Comtech is a Leader in the NextGen Public Safety Market

    Comtech is a Leader in the NextGen 911 Public Safety Market Comtech Strategic Position • Frost & Sullivan names Comtech as the fastest growing NG911 provider in the U.S. Software for Cellular 911 Call Routing and Next Generation 911 • Key NG-911 wins: Massachusetts, Pennsylvania, South Carolina, Ari

  8. Slide 8: Comtech is Well-Positioned to Exploit Inflection Point in the SATCOM Industry

    Comtech is Well-Positioned to Exploit Inflection Point in the SATCOM Industry We Are a Leading Global Provider of Satellite Ground Station Equipment Including Satellite Modems, Satellite Amplifiers, and Satellite Antennas Accelerating Growth of “One-Stop-Shop” Approach Rapidly Growing . Low-Cost Ban

  9. Slide 9: The Satellite Ground Station Equipment Market is Expected to Grow

    The Satellite Ground Station Equipment Market is Expected to Grow Comtech Strategic Position • #1 Provider of SCPC modems. High-Performance Innovative & Scalable Solid-State and Traveling SCPC Modems TDMA Modems Wave Tube Amplifiers • Leading provider of SATCOM amplifiers. • Entered into fixed X/Y s

  10. Slide 10: Revenue and Adjusted EBITDA Trends

    Revenue and Adjusted EBITDA Trends (USD in Millions) Comtech’s Fiscal Year Ends in July 18% 7% Severely Impacted by COVID-19,  Before COVID-driven headwinds, from 2016 to ‘16 –’19 CAGR ‘16 – ‘21 CAGR Supply Chain Disruptions, Afghanistan Troop 2019 the Company grew at an 18%+ CAGR and Performance p

  11. Slide 11: We Have Visibility to $1.2 Billion of Future Revenue

    We Have Visibility to $1.2 Billion of Future Revenue Plus significant potential revenue associated with a large, multi-year agreement for next-generation satellite technology $584.0M ~ $1.2B $370.0M $493.7M $214.0M $602.3M $123.7M $692.6M $478.6M Backlog Contracts in Place, Not in Backlog Revenue Vi

  12. Slide 12: Our Strategy To Drive Stockholder Value

    Our Strategy To Drive Stockholder Value  Michael D. Porcelain named President and CEO on December 31, 2021  Hired new COO, Maria Hedden, on March 28, 2022, to further increase operating efficiency Expand Talent Pool and  Hired new company-wide Vice President of Human Resources, Jennie Reilly, to

  13. Slide 13: We Believe the Future is Bright for Many Years to Come

    We Believe the Future is Bright for Many Years to Come Market Leadership Positions Commitment to Innovation and Engineering Strong Visibility with Growing Markets History of Long-Term Capital Return to Stockholders Experienced and Refreshed Management Team 13

  14. Slide 14: Additional Financial Data

    Additional Financial Data

  15. Slide 15: Overview of Q3 FY22 Performance

    Overview of Q3 FY22 Performance Q3 Financial Performance Commercial Solutions Government Solutions Revenue $88.1M Revenue $34.0M  Q3 FY 2022 Revenue was $122.1 million Adjusted EBITDA $15.3M Adjusted EBITDA ($0.1M) Adjusted EBITDA 17.4% Adjusted EBITDA N/A  Bookings were $113.4 million, key awards

  16. Slide 16: Company Overview

    Company Overview Approximately $372M or 64% of our FY 2021 revenues did not exist in FY 2015 FY 2015: 2016: 2018: 2018: 2019: 2020: 2020: 2021: 2021: 2022: Awarded multi- Awarded $45.0M Awarded $134.0M Received 3- Wins a Wins $211.0M Wins statewide Secured over Wins multi-year Awarded 5-year million

  17. Slide 17: Comtech's Two Segments Have Common Capabilities

    Comtech’s Two Segments Have Common Capabilities We leverage several key competencies, including R&D and engineering, across both segments to deliver superior capabilities to customers Commercial Solutions Government Solutions Fiscal 2021 Results: Secure Wireless Fiscal 2021 Results: Revenue Technolo

  18. Slide 18: Historical Revenue Results

    Historical Revenue Results $ in 000s $ in 000s $ in 000s Note (1) Comtech’s fiscal year end is July 31. 18

  19. Slide 19: Historical Bookings & Backlog

    Historical Bookings & Backlog Bookings Total Backlog (2) $ in 000s $ in 000s Note (1) Comtech’s fiscal year end is July 31. (2) See slide 12 for additional information related to funded backlog and unfunded portions of contracts in place. 19

  20. Slide 20: Our Customer Base

    Our Customer Base Notes (1) Comtech’s fiscal year end is July 31. (2) Totals may not foot due to rounding. 20

  21. Slide 21: Historical Balance Sheet Trends

    Historical Balance Sheet Trends Balance Sheet Jul. 31, Jul. 31, Jul. 31, Jul. 31, Jul. 31, April 30, $ in 000s 2017 2018 2019 2020 2021 2022 Cash and Cash Equivalents $ 41,844 $ 43,484 $ 45,576 $ 47,878 $ 30,861 $ 32,831 Working Capital 96,833 114,477 134,967 117,385 83,935 70,544 Total Assets 832,0

  22. Slide 22: Historical Research and Development Expense

    Historical Research and Development Expense Research and Development Expense $ in 000s Notes (1) Research and development expense includes company-funded and customer-funded. (2) Comtech’s fiscal year end is July 31. 22

  23. Slide 23: Recent Quarterly Operating Results

    Recent Quarterly Operating Results Q3 Q4 Q1 Q2 Q3 $ in 000s 2021 2021 2022 2022 2022 Revenue Commercial Solutions $ 91,364 $ 99,154 $ 78,934 $ 81,277 $ 88,131 Government Solutions 48,012 46,655 37,825 39,104 33,985 Total Revenue $ 139,376 $ 145,809 $ 116,759 $ 120,381 $ 122,116 Net Income (Loss) Att

  24. Slide 24: Historical Annual Operating Results

    Historical Annual Operating Results Impacted by COVID-19 $ in 000s 2017 2018 2019 2020 2021 Revenue Commercial Solutions $ 330,867 $ 345,076 $ 357,293 $ 353,730 $ 360,146 Government Solutions 219,501 225,513 314,504 262,985 221,549 Total Revenue $ 550,368 $ 570,589 $ 671,797 $ 616,715 $ 581,695 Net

  25. Slide 25: Market Data

    _ Market Data

  26. Slide 26: Market Data

    Market Data General Market Information Nasdaq Symbol: CMTL Institutional Holders : 216 (2) 52-Week Range : $11.26 - $27.46 Analyst Coverage: 6 (1) Source: Nasdaq Analysts Institution Analyst Name Citibank N.A. Asiya Merchant Jefferies Group LLC George Notter Noble Capital Markets Joe Gomes Northland

  27. Slide 27: Reconciliation of GAAP to Non-GAAP Financial Measures

    Reconciliation of GAAP to Non-GAAP Financial Measures

  28. Slide 28: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures

    Reconciliation of CMTL GAAP to Non-GAAP Financial Measures Adjusted EBITDA Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Reported net income (loss) $ 792 $ 7,363 $ (5,984) $ (21,874) $ (25) Income tax (benefit) expense 316 578 (2,053) (3,276) (771) Change in fair value of convertible preferred stock purch

  29. Slide 29: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures

    Reconciliation of CMTL GAAP to Non-GAAP Financial Measures Adjusted EBITDA 2017 2018 2019 2020 2021 Reported net income (loss) $ 15,827 $ 29,769 $ 25,041 $ 7,020 $ (73,480) Income tax expense (benefit) 9,654 (5,143) 3,869 2,290 (1,500) Write-off of deferred financing costs - - 3,217 - - Net interest

  30. Slide 30: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures

    Reconciliation of CMTL GAAP to Non-GAAP Financial Measures Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Earnings (Loss) per Diluted Share 2021 2021 2021 2021 2021 2022 2022 2022 GAAP earnings (loss) per diluted share $ (3.39) $ 0.17 $ 0.03 $ 0.28 $ (2.86) $ (0.43) $ (0.89) $ (0.06) Adjustments to reflect redemption valu

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