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Comtech Secures Refinancing, Reports Lower Sales in Q3 

By Rachel Jewett | June 18, 2024

      Comtech’s office in Chandler, Arizona. Photo: Comtech

      Comtech completed a refinancing and secured a new $222 million credit facility, the company announced Tuesday along with its third quarter financial results. 

      The credit facility is a new $60 million revolver and a $162 million term loan that matures in 2028. This replaces a previous $180.5 million credit facility that was set to mature in October. 

      Interim CEO John Ratigan said he expects this refinancing to improve the company’s financial performance going forward. 

      “Our balance sheet is stronger and can support the improved suppliers and growth of our business,” Ratigan said in an investor call on June 18. “As we look ahead, we can now conduct our business without the distraction associated with a debt maturity. All of our stakeholders benefit — our customers, our vendors, and our people are all excited to move forward unencumbered by reservations about liquidity.”

      Comtech also reported its third quarter fiscal year 2024 financial results, reporting that Q3 net sales decreased roughly 6% year-over-year to $128.1 million. 

      The company said in a letter to investors it believes that uncertainty around its refinancing had an impact on its financial performance for the quarter. 

      Adjusted EBITDA was $11.9 million, slightly down year-over-year as compared to $12.5 million in the third quarter of fiscal 2023. Adjusted EBITDA margin was 9.3%. 

      Comtech’s Satellite & Space Communications net sales were $71.4 million for the quarter, a 13% decrease compared to Q3 fiscal 2023.

      Comtech reported higher net sales of its troposcatter solutions to U.S. government end customers, including progress toward delivering next-generation troposcatter terminals to

      both the U.S. Marine Corps and U.S. Army. However, the company also saw lower net sales of high power solid state amplifiers due to the PST Divestiture in November 2023, lower net sales of the Comet troposcatter terminals to an international customer, and VSAT satcom equipment for the U.S. Army. 

      Ratigan emphasized moving forward now that the refinancing is completed. “For the first time since Comtech began its much-needed transformation, we now have a balance sheet that’s properly aligned with our near- and medium-term operating goals, and the space to fully implement operational improvements,” he said in the letter to investors.