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Segment Information | 12 Months Ended
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Jul. 31, 2021
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 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. We manage our business through the following reportable operating segments: Our Commercial Solutions segment offers satellite ground station technologies (such as modems and amplifiers) and public safety and location technologies (such as 911 call routing, 911 call handling and mapping solutions) to commercial customers and smaller government customers, such as state and local governments. This segment also serves certain large government customers (including the U.S. government) that have requirements for off-the-shelf commercial equipment. Our Government Solutions segment provides tactical satellite-based networks and ongoing support for complicated communications networks, troposcatter systems and solid-state, high-power amplifiers to large government end-users (including those of foreign countries), large international customers and domestic prime contractors. Our CODM primarily uses a metric that we refer to as Adjusted EBITDA to measure an operating segment’s performance and to make decisions about resources to be allocated. Our Adjusted EBITDA metric for the Commercial Solutions and Government Solutions segments do not consider any allocation of indirect expense, or any of the following: income taxes, interest (income) and other, write-off of deferred financing costs, interest expense, amortization of stock-based compensation, amortization of intangible assets, depreciation expense, estimated contract settlement costs, settlement of intellectual property litigation, acquisition plan expenses, restructuring costs, COVID-19 related costs, strategic emerging technology costs (for next-generation satellite technology), facility exit costs, strategic alternatives expenses, proxy solicitation related costs 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. Any amounts shown in the Adjusted EBITDA calculation for our Commercial Solutions and Government Solutions segments are directly attributable to those segments. Our Adjusted EBITDA is also used by our management in assessing the Company's operating results. Although closely aligned, the Company's definition of Adjusted EBITDA is different than the Consolidated EBITDA (as such term is defined in our Credit Facility) utilized for financial covenant calculations and also may differ from the definition of EBITDA or Adjusted EBITDA used by other companies 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 to Adjusted EBITDA is presented in the tables below:
|  | Fiscal Year Ended July 31, 2021
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 360,146,000 |  |  | 221,549,000 |  |  | — |  |  | $ | 581,695,000 |
Operating income (loss) |  | $ | 41,064,000 |  |  | 8,402,000 |  |  | (117,764,000) |  |  | $ | (68,298,000) |
Net income (loss) |  | $ | 39,200,000 |  |  | 9,553,000 |  |  | (122,233,000) |  |  | $ | (73,480,000) |
Provision for (benefit from) income taxes |  | 1,794,000 |  |  | (1,376,000) |  |  | (1,918,000) |  |  | (1,500,000) |
Interest (income) and other |  | 68,000 |  |  | 161,000 |  |  | (368,000) |  |  | (139,000) |
Interest expense |  | 2,000 |  |  | 64,000 |  |  | 6,755,000 |  |  | 6,821,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 9,983,000 |  |  | 9,983,000 |
Amortization of intangibles |  | 17,054,000 |  |  | 3,966,000 |  |  | — |  |  | 21,020,000 |
Depreciation |  | 7,451,000 |  |  | 1,586,000 |  |  | 342,000 |  |  | 9,379,000 |
Acquisition plan expenses |  | (1,052,000) |  |  | — |  |  | 101,344,000 |  |  | 100,292,000 |
Restructuring costs |  | 1,804,000 |  |  | 978,000 |  |  | — |  |  | 2,782,000 |
COVID-19 related costs |  | — |  |  | 1,046,000 |  |  | — |  |  | 1,046,000 |
Strategic emerging technology costs |  | — |  |  | 315,000 |  |  | — |  |  | 315,000 |
Adjusted EBITDA |  | $ | 66,321,000 |  |  | 16,293,000 |  |  | (6,095,000) |  |  | $ | 76,519,000 |
Purchases of property, plant and equipment |  | $ | 10,899,000 |  |  | 5,055,000 |  |  | 83,000 |  |  | $ | 16,037,000 |
Long-lived assets acquired in connection with acquisitions |  | $ | 45,515,000 |  |  | 2,443,000 |  |  | — |  |  | $ | 47,958,000 |
Total assets at July 31, 2021 |  | $ | 738,095,000 |  |  | 232,763,000 |  |  | 22,253,000 |  |  | $ | 993,111,000 |
|  | Fiscal Year Ended July 31, 2020
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 353,730,000 |  |  | 262,985,000 |  |  | — |  |  | $ | 616,715,000 |
Operating income (loss) |  | $ | 34,820,000 |  |  | 19,988,000 |  |  | (39,634,000) |  |  | $ | 15,174,000 |
Net income (loss) |  | $ | 34,414,000 |  |  | 20,232,000 |  |  | (47,626,000) |  |  | $ | 7,020,000 |
Provision for (benefit from) income taxes |  | 410,000 |  |  | (100,000) |  |  | 1,980,000 |  |  | 2,290,000 |
Interest (income) and other |  | (31,000) |  |  | (169,000) |  |  | 10,000 |  |  | (190,000) |
Interest expense |  | 27,000 |  |  | 25,000 |  |  | 6,002,000 |  |  | 6,054,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 9,275,000 |  |  | 9,275,000 |
Amortization of intangibles |  | 17,325,000 |  |  | 4,270,000 |  |  | — |  |  | 21,595,000 |
Depreciation |  | 8,347,000 |  |  | 1,446,000 |  |  | 768,000 |  |  | 10,561,000 |
Estimated contract settlement costs |  | 444,000 |  |  | — |  |  | — |  |  | 444,000 |
Acquisition plan expenses |  | 751,000 |  |  | — |  |  | 20,003,000 |  |  | 20,754,000 |
Adjusted EBITDA |  | $ | 61,687,000 |  |  | $ | 25,704,000 |  |  | $ | (9,588,000) |  |  | $ | 77,803,000 |
Purchases of property, plant and equipment |  | $ | 5,281,000 |  |  | 1,617,000 |  |  | 327,000 |  |  | $ | 7,225,000 |
Long-lived assets acquired in connection with acquisitions |  | $ | 6,060,000 |  |  | 32,391,000 |  |  | — |  |  | $ | 38,451,000 |
Total assets at July 31, 2020 |  | $ | 647,964,000 |  |  | 232,052,000 |  |  | 49,631,000 |  |  | $ | 929,647,000 |
|  | Fiscal Year Ended July 31, 2019
|  | Commercial Solutions |  | Government Solutions |  | Unallocated |  | Total
Net sales |  | $ | 357,293,000 |  |  | 314,504,000 |  |  | — |  |  | $ | 671,797,000 |
Operating income (loss) |  | $ | 36,053,000 |  |  | 28,997,000 |  |  | (23,643,000) |  |  | $ | 41,407,000 |
Net income (loss) |  | $ | 35,888,000 |  |  | 29,029,000 |  |  | (39,876,000) |  |  | $ | 25,041,000 |
Provision for income taxes |  | 19,000 |  |  | — |  |  | 3,850,000 |  |  | 3,869,000 |
Interest (income) and other |  | 75,000 |  |  | (41,000) |  |  | 1,000 |  |  | 35,000 |
Write-off of deferred financing costs |  | — |  |  | — |  |  | 3,217,000 |  |  | 3,217,000 |
Interest expense |  | 71,000 |  |  | 9,000 |  |  | 9,165,000 |  |  | 9,245,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 11,427,000 |  |  | 11,427,000 |
Amortization of intangibles |  | 14,944,000 |  |  | 3,376,000 |  |  | — |  |  | 18,320,000 |
Depreciation |  | 9,265,000 |  |  | 1,891,000 |  |  | 771,000 |  |  | 11,927,000 |
Estimated contract settlement costs |  | 6,351,000 |  |  | — |  |  | — |  |  | 6,351,000 |
Settlement of intellectual property litigation |  | — |  |  | — |  |  | (3,204,000) |  |  | (3,204,000) |
Acquisition plan expenses |  | — |  |  | — |  |  | 5,871,000 |  |  | 5,871,000 |
Facility exit costs |  | — |  |  | 1,373,000 |  |  | — |  |  | 1,373,000 |
Adjusted EBITDA |  | $ | 66,613,000 |  |  | 35,637,000 |  |  | (8,778,000) |  |  | $ | 93,472,000 |
Purchases of property, plant and equipment |  | $ | 6,293,000 |  |  | 1,902,000 |  |  | 590,000 |  |  | $ | 8,785,000 |
Long-lived assets acquired in connection with acquisitions |  | $ | 60,693,000 |  |  | — |  |  | — |  |  | $ | 60,693,000 |
Total assets at July 31, 2019 |  | $ | 662,580,000 |  |  | 186,438,000 |  |  | 38,693,000 |  |  | $ | 887,711,000 |
Unallocated expenses result from corporate expenses such as executive compensation, accounting, legal and other regulatory compliance related costs and also includes all of our amortization of stock-based compensation. During fiscal 2021, 2020 and 2019, we recorded $100,292,000, $20,754,000 and $5,871,000 of acquisition plan expenses, respectively, most of which were recorded primarily in our unallocated expenses. See Note (2) -"Acquisitions" for further information. In addition, offsetting unallocated expenses in fiscal 2019 is a $3,204,000 benefit as a result of a favorable ruling issued by the U.S. Court of Appeals for the Federal Circuit related to a legacy TCS intellectual property matter. During fiscal 2021, our Commercial Solutions segment recorded $1,804,000 of restructuring costs incurred to shift production of our key satellite earth station products to a new 146,000 square foot facility in Chandler, Arizona. There were no such charges recorded in fiscal 2020 or 2019. During fiscal 2021, our Government Solutions segment recorded $978,000 of restructuring costs incurred to consolidate certain administrative and operating functions in our tactical communications technologies product line. In addition, during fiscal 2021, this segment also recorded $1,046,000 of incremental operating costs related to our antenna facility located in the United Kingdom due to the impact of the COVID-19 pandemic, which resulted in a temporary but complete shut-down of this facility. There were no such charges recorded in fiscal 2020 or 2019. Interest expense in the tables above primarily relates to our Credit Facility, and includes the amortization of deferred financing costs. See Note (7) - "Credit Facility" for further discussion. In addition, interest expense for fiscal 2021 includes $1,178,000 of incremental interest expense related to a now terminated financing commitment letter, as discussed in more detail in Note (2) - "Acquisitions." During fiscal 2019, we recorded a $3,217,000 loss from the write-off of deferred financing costs primarily related to the Term Loan Facility portion of our Prior Credit Facility. See Note (7) - "Credit Facility" for further discussion. Intersegment sales in fiscal 2021, 2020 and 2019 by the Commercial Solutions segment to the Government Solutions segment were $3,481,000, $9,837,000 and $17,371,000, respectively. There were nominal sales by the Government Solutions segment to the Commercial Solutions segment for these fiscal periods. All intersegment sales are eliminated in consolidation and are excluded from the tables above. Unallocated assets at July 31, 2021 consist principally of cash and cash equivalents, income taxes receivable, corporate property, plant and equipment and deferred financing costs. The large majority of our long-lived assets are located in the U.S.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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