Comtech Telecommunications Corp. (NASDAQ:CMTL) Q4 2023 Earnings Call Transcript

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Joe Gomes: Thanks for that. And one last one for me. I’ll get back in queue. On the sale of the power systems unit, can you give us any kind of color on what that could mean in terms of the revenue and adjusted EBITDA that was related to that business? And is there — is that kind of in terms of potential sales, or do you continue to look at some other aspects of the Comtech business that might not fit in with the new One Comtech?

Mike Bondi: Joe, I’ll take the first part of that question, and then I think on the strategy going forward, I’ll hand it over to Ken. I think in terms of the sizing of this transaction, we won’t comment on how much revenue and EBITDA, but you can get a sense for it based on the size of the purchase price, relatively speaking. And in terms of the impact to fiscal ’24, obviously, we’re subject to customary closing conditions. We’re expecting the close to be in the short term. But again, given the timing being a little unknown, it’s hard to really decipher what the adjustment would be to the forecast. But I would say at this point, that’s probably all we’re going to say on the transaction today.

Ken Peterman: Joe, commenting on the strategic portfolio management activity, this particular business, which is really a solid business, it didn’t have a lot of synergy with other parts of our business, it didn’t have a lot of synergy with our technology roadmaps and that kind of thing. So that kind of a portfolio management decision, while it’s difficult to make, I think it’s the right decision for all concerned. Now, portfolio management is something that we’re beginning to do on a continuum. It’s a part of any business. Management and executive leadership team operations were involved in dynamic market convergences, technology inflections, and I think that that while we don’t have anything to say on that, okay, and I’m not forecasting anything I think portfolio management is something that we have a responsibility to do on a continuing basis. That’s all I mean to say.

Joe Gomes: Okay, thanks for that, guys. Really appreciate it. And again, congrats on the quarter.

Mike Bondi: Thank you.

Ken Peterman: Thank you, Joe.

Operator: And we’ll move next to Greg Burns with Sidoti. Your line is open.

Greg Burns: Thanks. Just to follow up on the GFSR contract and what you’re contemplating in your guidance, is that — is none of that in the guidance for 1Q? And if for whatever reason it closes or starts earlier than you expect, there might be some upside, is that how we should be…

Mike Bondi: Yeah, Greg, on Q1, I would say, you could think of it’s very nominal or anything at this point just given the timing of the award and what’s happening.

Greg Burns: Okay. And then you didn’t mention any update on what’s going on with your LEO customer? Are they progressing? Are you getting closer to seeing production orders for them? Like, what’s the outlook for that in fiscal ’24?

Mike Bondi: In terms of the timing for that, Greg, certainly we’re tracking our progress alongside where the customer wants us to be and where they are on their schedule. I would say, at this point in time, no major changes to our outlook for production orders. I think if we get an order, it would be for the next couple of months of deliveries. So, I wouldn’t expect multiple orders. It might be one large order to work from. In terms of the specific timing though, I can’t comment on today.

Ken Peterman: The only thing — this is Ken. The only thing we can say I think is that it is progressing on the timeline that we expected.

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