XML 38 R21.htm IDEA: XBRL DOCUMENT
v3.24.4

Segment Information | 3 Months Ended
--- | ---
Oct. 31, 2024
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. As of the issuance date, our CODM, for purposes of FASB ASC 280, is our Chairman, President and Chief Executive Officer, Kenneth H. Traub. Satellite and Space Communications is organized into four technology areas: satellite modem and amplifier technologies, troposcatter technologies, government services and space components. This segment offers customers: satellite ground infrastructure technologies, services and system integration that facilitate the transmission of voice, video and data over GEO, MEO and LEO satellite constellations, including traveling wave tube power amplifiers, modems, VSAT platforms and frequency converters; over-the-horizon microwave solutions that can transmit digitized voice, video, and data over distances up to 200 miles using the troposphere and diffraction; professional engineering, training and field support services, including cybersecurity, for multiple U.S. government agencies; and procurement and supply chain management of high reliability Electrical, Electronic and Electromechanical ("EEE") parts for satellite, launch vehicle and manned space applications. Terrestrial and Wireless Networks is organized into three service areas: next generation 911 and call delivery, Solacom call handling solutions, and trusted location and messaging solutions. This segment offers customers: Wireless/VolP 911 location and routing services to connect emergency calls to Public Safety Answering Points ("PSAPs"); SMS text to 911 services, providing alternate paths for individuals who need to request assistance (via text messaging) a method to reach PSAPs; next generation 911 solutions, providing emergency call routing, location validation, policy-based routing rules, logging and security functionality; Emergency Services IP Network transport infrastructure for emergency services communications and support of next generation 911 services; call handling applications for PSAPs; wireless emergency alerts solutions for network operators; and software and equipment for location-based and text messaging services for various applications, including for public safety, commercial and government services. 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 Satellite and Space Communications and Terrestrial and Wireless Networks segments do not consider allocation of any indirect expenses that are unrelated to the segment's operations, or any of the following: interest, income taxes, depreciation, amortization of intangibles, impairment of long-lived assets, including goodwill, amortization of cost to fulfill assets, amortization of stock-based compensation, CEO transition costs, change in fair value of warrants and derivatives, proxy solicitation costs, restructuring costs, strategic emerging technology costs (for next-generation satellite technology) and write-off of deferred financing costs, and in the recent past, acquisition plan expenses, change in fair value of the convertible preferred stock purchase option liability, COVID-19 related costs, facility exit costs, strategic alternatives expenses and other and loss on business divestiture. 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 Satellite and Space Communications and Terrestrial and Wireless Networks 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 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 loss to Adjusted EBITDA is presented in the tables below:
|  | Three months ended October 31, 2024
|  | Satellite and Space Communications |  | Terrestrial and Wireless Networks |  | Unallocated |  | Total
Net sales |  | $ | 58,933,000 |  |  | 56,867,000 |  |  | — |  |  | $ | 115,800,000 |
Operating income (loss) |  | $ | (118,807,000) |  |  | 5,315,000 |  |  | (15,678,000) |  |  | $ | (129,170,000) |
Net income (loss) |  | $ | (119,391,000) |  |  | 5,342,000 |  |  | (34,358,000) |  |  | $ | (148,407,000) |
(Benefit from ) provision for income taxes |  | (55,000) |  |  | (9,000) |  |  | 2,198,000 |  |  | 2,134,000 |
Interest expense |  | 11,000 |  |  | — |  |  | 9,521,000 |  |  | 9,532,000 |
Interest (income) and other |  | 628,000 |  |  | (18,000) |  |  | 25,000 |  |  | 635,000 |
Write-off of deferred financing costs |  | — |  |  | — |  |  | 1,412,000 |  |  | 1,412,000 |
Change in fair value of warrants and derivatives |  | — |  |  | — |  |  | 5,524,000 |  |  | 5,524,000 |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 155,000 |  |  | 155,000 |
Amortization of intangibles |  | 2,976,000 |  |  | 3,617,000 |  |  | — |  |  | 6,593,000 |
Depreciation |  | 847,000 |  |  | 1,962,000 |  |  | 86,000 |  |  | 2,895,000 |
Impairment of long-lived assets, including goodwill |  | 79,555,000 |  |  | — |  |  | — |  |  | 79,555,000 |
Amortization of cost to fulfill assets |  | 261,000 |  |  | — |  |  | — |  |  | 261,000 |
Proxy solicitation costs |  | — |  |  | — |  |  | 1,583,000 |  |  | 1,583,000 |
CEO transition costs |  | — |  |  | — |  |  | 598,000 |  |  | 598,000 |
Restructuring costs |  | 13,740,000 |  |  | 90,000 |  |  | 4,023,000 |  |  | 17,853,000 |
Strategic emerging technology costs |  | 280,000 |  |  | — |  |  | — |  |  | 280,000 |
Adjusted EBITDA |  | $ | (21,148,000) |  |  | $ | 10,984,000 |  |  | $ | (9,233,000) |  |  | $ | (19,397,000) |
Purchases of property, plant and equipment |  | $ | 50,000 |  |  | 2,108,000 |  |  | 257,000 |  |  | $ | 2,415,000 |
Total assets at October 31, 2024 |  | $ | 300,262,000 |  |  | 458,443,000 |  |  | 34,498,000 |  |  | $ | 793,203,000 |
|  | Three months ended October 31, 2023
|  | Satellite and Space Communications |  | Terrestrial and Wireless Networks |  | Unallocated |  | Total
Net sales |  | $ | 102,388,000 |  |  | 49,523,000 |  |  | — |  |  | $ | 151,911,000 |
Operating income (loss) |  | $ | 10,105,000 |  |  | 4,040,000 |  |  | (12,059,000) |  |  | $ | 2,086,000 |
Net income (loss) |  | $ | 9,303,000 |  |  | 4,145,000 |  |  | (14,885,000) |  |  | $ | (1,437,000) |
Provision for (benefit from) income taxes |  | 227,000 |  |  | (300,000) |  |  | (1,271,000) |  |  | (1,344,000) |
Interest expense |  | 872,000 |  |  | — |  |  | 4,060,000 |  |  | 4,932,000 |
Interest (income) and other |  | (297,000) |  |  | 195,000 |  |  | 37,000 |  |  | (65,000) |
Amortization of stock-based compensation |  | — |  |  | — |  |  | 2,645,000 |  |  | 2,645,000 |
Amortization of intangibles |  | 1,672,000 |  |  | 3,617,000 |  |  | — |  |  | 5,289,000 |
Depreciation |  | 954,000 |  |  | 1,973,000 |  |  | 95,000 |  |  | 3,022,000 |
Amortization of cost to fulfill assets |  | 240,000 |  |  | — |  |  | — |  |  | 240,000 |
Restructuring costs |  | 790,000 |  |  | 7,000 |  |  | 2,919,000 |  |  | 3,716,000 |
Strategic emerging technology costs |  | 1,370,000 |  |  | — |  |  | — |  |  | 1,370,000 |
Adjusted EBITDA |  | $ | 15,131,000 |  |  | 9,637,000 |  |  | (6,400,000) |  |  | $ | 18,368,000 |
Purchases of property, plant and equipment |  | $ | 903,000 |  |  | 1,736,000 |  |  | 577,000 |  |  | $ | 3,216,000 |
Total assets at October 31, 2023 |  | $ | 527,343,000 |  |  | 460,088,000 |  |  | 25,112,000 |  |  | $ | 1,012,543,000 |
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. See Note (1) - General for information related to CEO transition and proxy solicitation related costs. During the three months ended October 31, 2024, our Unallocated segment also incurred $4,023,000 of restructuring costs focused on: (i) legal and advisory fees associated with our previously announced transformation strategy to explore strategic alternatives and operational initiatives to align our cost structure with our future anticipated business, and (ii) legal and advisory fees related to our Credit Facility and to improve liquidity. During the three months ended October 31, 2023, our Unallocated segment incurred $2,919,000 of restructuring costs focused on streamlining our operations and legal and other related expenses for the PST Divestiture. During the three months ended October 31, 2024, our Satellite and Space Communications segment recorded a $79,555,000 non-cash goodwill impairment charge (see Note (16) - Long-lived Assets, including Goodwill for additional information). During the three months ended October 31, 2024, our Satellite and Space Communications segment also recorded $13,740,000 of restructuring costs, which included: (i) $11,369,000 of non-cash inventory write downs included in Cost of Sales in our Condensed Consolidated Statements of Operations (see Note (8) - Inventories for additional information); and (ii) $2,371,000 of costs included in Selling, General and Administrative expenses in our Condensed Consolidated Statements of Operations related to our transformation strategy (principally, the CGC Divestiture). During the three months ended October 31, 2023, our Satellite and Space Communications segment recorded $790,000 of restructuring costs to streamline our operations and improve efficiency, including costs related to the relocation of certain of our satellite ground infrastructure production facilities to our 146,000 square foot facility in Chandler, Arizona. In addition, during the three months ended October 31, 2024, we incurred $280,000 of strategic emerging technology costs for next-generation satellite technology. Similar strategic emerging technology costs of $1,370,000 were incurred during the three months ended October 31, 2023. During the three months ended October 31, 2024 and 2023, our Terrestrial and Wireless Networks segment recorded $90,000 and $7,000, respectively, of restructuring costs primarily incurred to streamline our operations and improve efficiency. Interest expense in the tables above primarily relates to our credit facilities, and includes the amortization of deferred financing costs. See Note (10) - Credit Facility and Note (11) - Subordinated Credit Facility for further discussion. Intersegment sales for the three months ended October 31, 2024 and 2023 between the Satellite and Space Communications segment and the Terrestrial and Wireless Networks segment were nominal. All intersegment sales are eliminated in consolidation and are excluded from the tables above. Unallocated assets at October 31, 2024 consist principally of cash and cash equivalents, corporate property, plant and equipment, operating lease right of use assets and deferred financing costs. The large majority of our long-lived assets are located in the U.S.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 270 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482964/270-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (ee) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 Reference 5: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 Reference 6: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 54 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-54 Reference 7: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 47 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-47 Reference 8: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 54 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-54 Reference 9: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 47 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-47 Reference 10: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 54 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-54 Reference 11: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 47 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-47 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-22 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-31 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-34 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-26C Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-26B Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-15 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-42 Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-40 Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/280/tableOfContent Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-26 Reference 22: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-41 Reference 23: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 24: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 25: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration