Comtech Telecommunications Corp. (NASDAQ:CMTL) Q1 2023 Earnings Call Transcript

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Michael Bondi: So, in terms of Ohio, I think at this point, it’s not likely to be voted on before the end of the year. In our view, just to remind everybody that that was just a booking this year and there was likely no revenue contribution, just given that you have to do a lot of design work upfront. But we are working very closely with our end customer, they certainly have a need and a desire for the application. And trying to figure out the next steps, you know, in terms of what kind of funding we can get. Our view right now in terms of our outlook is, it’s certainly a large contract potential could be north of $100 million. But right now in terms of setting our own expectations, we’re viewing is it’s something that could be in the short-term to get a booking, but in terms of revenue contribution, or EBITDA contribution wouldn’t be until next year.

And it’s likely to be something that’s going to be a function of how much funding they give us up front. I don’t think so, at this point, give us the whole thing up front, it might be in increments, but it’s still — stories to be told there. I think we have to wait for the next session to see how the vote goes.

Greg Burns: Okay. And the pipeline for E911, is there any other large state contracts that are up for bid that we should be focusing on?

Michael Bondi: Yes, there are other opportunities. So, despite getting pushed out for us, Ohio, we certainly have identified other near-term opportunities. We’re not sitting idle in terms of the competitive nature of those procurements. I’m not going to name the states or the regions, but there are a handful of those that are coming to market and we’ll be responding and I think with our recent wins and our capabilities, we think we have good positioning there. But we’ll have more to report on that in the future.

Greg Burns: Okay. And then lastly, you’re bringing on that added capacity in Arizona now and I think a large part of that is to satisfy some of their high volume — some new high volume production for the new LEO and MEO satellite networks that are out there, is there any update on when those might ramp up and start contributing to revenue?

Michael Bondi: Yes, sure, in terms of our progress here with our large LEO customer, as we announced last quarter, we expanded our relationship. Certainly, there’s a desire to move fast. And the facility that we are bringing online, has the capabilities to meet the high volume demands that we would expect from this contract over time. And in terms of where we’re sitting with the customer, like I said, things are progressing. We expanded the relationship, we’re talking about other aspects of that relationship, in other areas of this overall relationship. And we’ll see in terms of our timing for production orders, I think that’s still early to call. But as always said it could be later in this year, early part of next year with revenue contributions in 2024. But it’s certainly going in the right direction. I don’t know if anybody else wants to say–

Maria Hedden: Yes, just some other things, in addition to what Mike shared, obviously, there’s a couple of development contracts that we’re moving into production phase. And with the rollout of our new SMT line, it will definitely make us more efficient as we build those units, and continue to drive production costs higher for that facility. So, we definitely are planning as part of that release and opening of the facility to drive additional throughput through the facility, and workload in that area.

Greg Burns: Perfect. Thank you.

Operator: And we’ll take our last question from Asiya Merchant with Citigroup. Please go ahead.

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