Importantly, Q2 fiscal 2024 marks our third consecutive quarter of GAAP operating income since Q4 of fiscal 2021. As explained in more detail and reconciled in our Form 10-Q filed earlier today, we utilize the non-GAAP measure that we refer to as adjusted EBITDA. For Q2 fiscal 2024, adjusted EBITDA was $15.1 million. As a percentage of net sales, adjusted EBITDA was 11.3%, an improvement from the $11.3 million, or 8.5%, we achieved in Q2 of fiscal 2023. The increase in adjusted EBITDA, both in dollars and as a percentage of net sales, reflects lower research and development expenses in both of our reportable operating segments and the benefit of our One Comtech lean initiatives, all set in part by a low gross profit percentage during the quarter due to overall product mix changes and lower net sales activity.
As we enter the third quarter of fiscal 2024, business conditions continue to be challenging and the operating environment is largely unpredictable. Despite these business conditions and resulting challenges, and although we anticipate some variability from time to time, as disclosed today in our 10-Q, we expect net sales and adjusted EBITDA for fiscal 2024 to be better than fiscal 2023. Such expectation considers our strong backlog of $680 million as of January 31, 2024, and revenue visibility of approximately $1.6 billion. Now, before turning the call back over to John to wrap up, I’ll provide an update on our refinancing efforts. The team has been hard at work evaluating alternatives and supporting extensive due diligence with potential new lenders.
We’ve made tremendous progress on this front during the second quarter. As mentioned, we cleared the divestiture of PST in November, we addressed the restructuring of our convertible preferred stock in late January by upsizing the investment and among other changes, moving the optional redemption date out two years to October of 2028. And on the heels of that, pressing ahead with our refinancing efforts, we down selected from a pool of well-known lenders and centered around the debt capital structure consisting of a term loan coupled with an asset-based revolving loan. Obviously, the events of last week have interrupted the momentum gained with respect to our refinancing efforts, but I and the rest of the executive management team remain confident that we will get this resolved as one of our highest priorities.
Now, let me turn the call back over to John.
John Ratigan: Thanks, Mike. Before we end the call and get back to work, I’ll offer a final thought. As I said at the top of the call, I take seriously my commitment to the company, employees, customers, vendors, and investors. You can expect me to be direct in my communications and clear about my priorities. Our top priority right now is strengthening our balance sheet. We completed the first step toward this objective with a strategic growth investment announced in January. We are working diligently to complete the final step of refinancing in the near term. When I joined Comtech, I was enthusiastic about the opportunities that lay ahead for the company. Today, I am proud to lead this talented organization. We have end markets that are changing and growing, the best people and products in the industry and in our growing sales and visible revenues, a vote of confidence and appreciation from our customers that Comtech is the right partner to help them navigate a challenging landscape.
Thank you again for your time today. I look forward to getting to know many of you in the days and weeks ahead. And operator, that ends our call for today.
Operator: Thank you, sir. This does conclude today’s program. Thank you for your participation. You may disconnect at any time.
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