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Segment Information | 6 Months Ended
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Jan. 31, 2017
Segment Reporting [Abstract] |
Segment Information | Segment Information Reportable operating segments are determined based on Comtech’s management approach. The management approach, as defined by FASB ASC 280, "Segment Reporting," is based on the way that the chief operating decision-maker ("CODM") organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our CODM, for purposes of FASB ASC 280, is our Chief Executive Officer and President. As disclosed in more detail in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016, we changed the way we report and evaluate segment information. We had previously reported three reportable segments: Telecommunications Transmission, RF Microwave Amplifiers and Mobile Data Communications. Beginning with our third quarter of fiscal 2016, we began managing our business in two reportable segments: Commercial Solutions and Government Solutions. As a result, the segment information for the prior fiscal periods has been recasted to conform to the current fiscal period's presentation. Our Commercial Solutions segment serves commercial customers and smaller government customers, such as state and local governments, that require advanced communications technologies to meet their needs. This segment also serves certain large government customers (including the U.S. government) when they have requirements for off-the-shelf commercial equipment. Commercial solutions products include satellite earth station communications equipment such as modems and traveling wave tube amplifiers, public safety technologies including those that are utilized in next generation 911 systems and enterprise technologies such as trusted location and text-messaging platforms. Our Government Solutions segment serves large U.S. and foreign government end-users that require mission critical technologies and systems. Government solutions products include command and control technologies (such as remote sensing tracking systems, rugged solid state drives, land mobile products, and quick deploy satellite systems), troposcatter technologies systems (such as digital troposcatter multiplexers, digital over-the-horizon modems, troposcatter systems, and frequency converter systems), and RF power and switching technologies products (such as solid-state high-power narrow and broadband amplifiers, enhanced position location reporting system ("EPLRS") amplifier assemblies, identification friend or foe amplifiers, and amplifiers used in the counteraction of improvised explosive devices). Our CODM primarily uses a metric that we refer to as Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") to measure an operating segment’s performance and to make decisions about resources to be allocated. Our Adjusted EBITDA metric does not consider any allocation of the following: income taxes, interest income and other expense, interest expense, amortization of stock-based compensation, amortization of intangibles, depreciation expense, acquisition plan expenses, an adjustment to reflect a lower than estimated loss associated with a settlement of a TCS intellectual property matter or strategic alternatives analysis expenses and other. These items, while periodically affecting our results, may vary significantly from period to period and may have a disproportionate effect in a given period, thereby affecting the comparability of results. Adjusted EBITDA is used by management in assessing the Company's operating results. The Company's definition of Adjusted EBITDA is different than the Consolidated EBITDA (as such term is defined in our Secured Credit Facility) utilized for financial covenant calculations and also may differ from the definition of Adjusted EBITDA used by other companies (including TCS prior to our acquisition) and, therefore, may not be comparable to similarly titled measures used by other companies. Operating segment information, along with a reconciliation of segment net income (loss) and consolidated net income (loss) to Adjusted EBITDA is presented in the tables below:
| Three months ended January 31, 2017
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 82,103,000 |  |  | 56,925,000 |  |  | — |  |  | $ | 139,028,000 |
Operating income |  | $ | 5,864,000 |  |  | 2,338,000 |  |  | 4,647,000 |  |  | $ | 12,849,000 |
Net income (loss) |  | $ | 5,730,000 |  |  | 2,362,000 |  |  | (1,507,000 | ) |  | $ | 6,585,000 |
Provision for income taxes |  | 135,000 |  |  | — |  |  | 3,351,000 |  |  | 3,486,000 |
Interest (income) and other expense |  | (60,000 | ) |  | (23,000 | ) |  | 9,000 |  |  | (74,000 | )
Interest expense |  | 59,000 |  |  | (1,000 | ) |  | 2,794,000 |  |  | 2,852,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 1,019,000 |  |  | 1,019,000 |
Amortization of intangibles |  | 4,413,000 |  |  | 1,619,000 |  |  | — |  |  | 6,032,000 |
Depreciation |  | 2,429,000 |  |  | 752,000 |  |  | 387,000 |  |  | 3,568,000 |
Settlement of intellectual property litigation |  | — |  |  | — |  |  | (9,979,000 | ) |  | (9,979,000 | )
Adjusted EBITDA |  | $ | 12,706,000 |  |  | 4,709,000 |  |  | (3,926,000 | ) |  | $ | 13,489,000 |
Purchases of property, plant and equipment |  | $ | 1,652,000 |  |  | 413,000 |  |  | 7,000 |  |  | $ | 2,072,000 |
Total assets at January 31, 2017 |  | $ | 620,147,000 |  |  | 197,035,000 |  |  | 66,326,000 |  |  | $ | 883,508,000 |
| Three months ended January 31, 2016
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 50,722,000 |  |  | 19,601,000 |  |  | — |  |  | $ | 70,323,000 |
Operating income (loss) |  | $ | 5,241,000 |  |  | 4,679,000 |  |  | (6,731,000 | ) |  | $ | 3,189,000 |
Net income (loss) |  | $ | 5,023,000 |  |  | 4,688,000 |  |  | (7,235,000 | ) |  | $ | 2,476,000 |
Provision for income taxes |  | 116,000 |  |  | — |  |  | 634,000 |  |  | 750,000 |
Interest (income) and other expense |  | 29,000 |  |  | (9,000 | ) |  | (130,000 | ) |  | (110,000 | )
Interest expense |  | 73,000 |  |  | — |  |  | — |  |  | 73,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 1,074,000 |  |  | 1,074,000 |
Amortization of intangibles |  | 1,196,000 |  |  | — |  |  | — |  |  | 1,196,000 |
Depreciation |  | 1,186,000 |  |  | 272,000 |  |  | 8,000 |  |  | 1,466,000 |
Acquisition plan expenses |  | — |  |  | — |  |  | 2,337,000 |  |  | 2,337,000 |
Adjusted EBITDA |  | $ | 7,623,000 |  |  | 4,951,000 |  |  | (3,312,000 | ) |  | $ | 9,262,000 |
Purchases of property, plant and equipment |  | $ | 467,000 |  |  | 347,000 |  |  | 13,000 |  |  | $ | 827,000 |
Total assets at January 31, 2016 |  | $ | 227,963,000 |  |  | 77,733,000 |  |  | 156,474,000 |  |  | $ | 462,170,000 |
| Six months ended January 31, 2017
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 158,281,000 |  |  | 116,533,000 |  |  | — |  |  | $ | 274,814,000 |
Operating income (loss) |  | $ | 8,962,000 |  |  | 4,838,000 |  |  | (1,679,000 | ) |  | $ | 12,121,000 |
Net income (loss) |  | $ | 8,743,000 |  |  | 4,865,000 |  |  | (9,512,000 | ) |  | $ | 4,096,000 |
Provision for income taxes |  | 158,000 |  |  | — |  |  | 1,766,000 |  |  | 1,924,000 |
Interest (income) and other expense |  | (62,000 | ) |  | (26,000 | ) |  | 12,000 |  |  | (76,000 | )
Interest expense |  | 123,000 |  |  | (1,000 | ) |  | 6,055,000 |  |  | 6,177,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 1,989,000 |  |  | 1,989,000 |
Amortization of intangibles |  | 8,849,000 |  |  | 3,238,000 |  |  | — |  |  | 12,087,000 |
Depreciation |  | 5,016,000 |  |  | 1,503,000 |  |  | 798,000 |  |  | 7,317,000 |
Settlement of intellectual property litigation |  | — |  |  | — |  |  | (9,979,000 | ) |  | (9,979,000 | )
Adjusted EBITDA |  | $ | 22,827,000 |  |  | 9,579,000 |  |  | (8,871,000 | ) |  | $ | 23,535,000 |
Purchases of property, plant and equipment |  | $ | 3,647,000 |  |  | 423,000 |  |  | 77,000 |  |  | $ | 4,147,000 |
Total assets at January 31, 2017 |  | $ | 620,147,000 |  |  | 197,035,000 |  |  | 66,326,000 |  |  | $ | 883,508,000 |
| Six months ended January 31, 2016
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 93,672,000 |  |  | 40,768,000 |  |  | — |  |  | $ | 134,440,000 |
Operating income (loss) |  | $ | 7,489,000 |  |  | 9,759,000 |  |  | (11,891,000 | ) |  | $ | 5,357,000 |
Net income (loss) |  | $ | 7,200,000 |  |  | 9,775,000 |  |  | (13,060,000 | ) |  | $ | 3,915,000 |
Provision for income taxes |  | 92,000 |  |  | — |  |  | 1,424,000 |  |  | 1,516,000 |
Interest (income) and other expense |  | 50,000 |  |  | (16,000 | ) |  | (256,000 | ) |  | (222,000 | )
Interest expense |  | 148,000 |  |  | — |  |  | — |  |  | 148,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 2,125,000 |  |  | 2,125,000 |
Amortization of intangibles |  | 2,572,000 |  |  | — |  |  | — |  |  | 2,572,000 |
Depreciation |  | 2,439,000 |  |  | 541,000 |  |  | 16,000 |  |  | 2,996,000 |
Acquisition plan expenses |  | — |  |  | — |  |  | 3,729,000 |  |  | 3,729,000 |
Adjusted EBITDA |  | $ | 12,501,000 |  |  | 10,300,000 |  |  | (6,022,000 | ) |  | $ | 16,779,000 |
Purchases of property, plant and equipment |  | $ | 948,000 |  |  | 500,000 |  |  | 15,000 |  |  | $ | 1,463,000 |
Total assets at January 31, 2016 |  | $ | 227,963,000 |  |  | 77,733,000 |  |  | 156,474,000 |  |  | $ | 462,170,000 |
Unallocated expenses result from corporate expenses such as executive compensation, accounting, legal and other regulatory compliance related costs. Unallocated expenses for the three and six months ended January 31, 2016 include $2,337,000 and $3,729,000, respectively, of transaction costs primarily related to our acquisition of TCS. There were no such expenses during the six months ended January 31, 2017. Interest expense for the three and six months ended January 31, 2017 includes $2,708,000 and $5,883,000, respectively, related to our Secured Credit Facility, as further discussed in Note (10) - “Secured Credit Facility,” including the amortization of deferred financing costs. There was no such corresponding interest expense for the three and six months ended January 31, 2016. Intersegment sales for the three months ended January 31, 2017 and 2016 by the Commercial Solutions segment to the Government Solutions segment were $3,059,000 and $805,000, respectively. Intersegment sales for the six months ended January 31, 2017 and 2016 by the Commercial Solutions segment to the Government Solutions segment were $6,485,000 and $1,884,000, respectively. There were nominal sales by the Government Solutions segment to the Commercial Solutions segment for these periods. Unallocated assets at January 31, 2017 consist principally of cash, income taxes receivable, corporate property, plant and equipment and deferred financing costs. Substantially all of our long-lived assets are located in the U.S. and all intersegment sales are eliminated in consolidation and are excluded from the tables above.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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