Comtech Telecommunications Corp.

Welcome to ComTech's Fiscal Third Quarter 2024 Earnings Conference Call. As a reminder, this conference is being recorded today, Tuesday, June 18, 2024. I would now like to turn the conference over to Mrs. Maria Ciriello of ComTech. Please go ahead, Maria.

Thank you, Operator, and thanks to our investors for taking the time to dial in today. Welcome to Comtex Telecommunication Corp's conference call for the third quarter of fiscal year 2024. Today, I'm here with Comtex Chief Executive Officer John Radigan. We're also joined today by Mike Bondy, Comtex CFO. Before we get started today, please note we have a detailed discussion of the quarter in our shareholder letter available on our website. Certain information presented in this call will include, but not be limited to, information relating to the future performance and financial condition of the company, the company's plans, objectives, and business outlook, and the plans, objectives, and business outlook of the company's management. The company's assumptions regarding such performance, business outlook, and plans are forward-looking in nature and always involve significant risks and uncertainties. Actual results could differ materially from such forward-looking information. Any forward-looking statements are qualified in their entirety by cautionary statements contained in the company's SEC filings. Now, I'm pleased to introduce Comtec's CEO, John Radigan. John?

Thank you, Maria. And as you know, I'm relatively new to the role of CEO at Comtec, but I'm feeling that I'm already making a positive difference. Last quarter during our earnings call, I said that it was clear to me that the foremost concern of all of our stakeholders and certainly our shareholders was refinancing our balance sheet. I also said that executing a refinancing would be my highest priority. As uncertainty saw, we announced the completion of a $222 million refinancing that replaces our bank facility with a new credit facility consisting of a $60 million asset-based lending facility and a $162 million term loan that matures in 2028. The completion of the refinancing is important for ComTech in many ways. First, our balance sheet is stronger and can support the improved performance and growth of our business as we look ahead. We can now conduct our business without the distraction associated with a looming debt maturity all of our stakeholders would benefit from. Our customers, our vendors, and our people are all excited to move forward unencumbered by reservations about liquidity. It also means that my top operational priority is now the acceleration of our cash conversion cycle and managing our unbilled receivables downward by executing against some of our large multi-year contracts. This quarter, we made progress in delivering against our next-generation troposcatter awards with the U.S. Marine Corps and the U.S. Army. With the refinancing complete, the ComTech team is now wholly and wholly focused on accelerating execution against these contracts to deliver value to both our shareholders and our customers. This leads me to my second key point. ComTech hasn't been waiting to move forward. We've been winning business this entire time, demonstrating the strength of our technologies and mission-critical nature of our solutions. I'll give you the most recent obvious example. Following a competitive process on May 16th, the Commonwealth of Massachusetts voted to award ComTech a five-year contract with a five-year extension option for the operations and maintenance of their statewide next-generation 911 public safety system. initial value of this contract is in excess of 120 million dollars with additional upside potential over the 10-year life of the agreement these wins combined with our recent 48 million dollar contract extension with the state of washington demonstrate the competitive advantage of our people and our technology within our satellite and space communications segment the contact team continues to deliver against the next generation troposcatter awards with the U.S. Marine Corps and the U.S. Army. In addition to completing work against existing contracts, ComTech continues to expand its relationship with the U.S. Army with a recent $13.5 million award for VSAT equipment and related services. This leads me to a higher level point that I've made both publicly and in my direct conversations with investors and that I want to emphasize here today. ComTech has a long-standing history of providing mission-critical communication solutions to its customers. In this country, for example, it's easy to take a 911 call for granted. But making sure that those calls have the public safety result they should is an extraordinarily complex problem, and ComTech is at the forefront of the technology that solves it. We play a similar critical role in satellite and space markets, providing communications infrastructure that ensures people, businesses, and governments can connect anywhere on Earth under any conditions. This mission-critical role and capability is what I want our investors to remember and hope the markets reconsider. The fact is that our ability to develop and deliver superior technology remains fully intact. And Comtech's underlying value is one of just a few businesses in the world that do what we can do remains unchanged. So what has changed? First, we now move ahead with a committed financing and strengthened balance sheet. Second, we can more successfully leverage two underlying businesses that each see growing demand from traditional buyers, from upgrade cycles in public safety and satellite and space communications, and from opportunities in the new end markets. Mike will speak in detail to this quarter's financial performance in a moment. Before I make that handoff, I do want to make one other point to our shareholders. It says something very positive about our business and our company that we continue to be able to attract exceptional talent. You may have seen these announcements or read our newsletters, but it's meaningful to the capital markets as well that we have done the following. announced Jeff Robertson's appointment as president of our terrestrial and wireless business back in April. And it's safe to say that he's hit the ground running. Jeff is a known leader and expert in the 911 and public safety space. And even as he and his team have secured the contract with Massachusetts, he's moving fast to both improve our existing operations and grow into new opportunities. We hired two other senior public safety officials, Tom Guthrie and John Whitehead. And on the satellite and space side, we added Raleigh Regal as Vice President of Business Development and Sales. Raleigh is a well-known across the industry for its expertise and ability to drive growth, both in terms of top-line sales and also in terms of building teams. I wrote this in our investor letter and will repeat it here. I don't think CompTech has ever had a deeper and stronger bench than it does today. ComTech is a good business that offers mission-critical solutions to the world's most demanding customers. We've got some of the best people and technologies in the market, and the markets we are selling into are themselves growing. Taken together, I remain optimistic about our future and our ability to create value for all of our stakeholders.