Comtech Telecommunications Corp Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Joe Gomes - Noble Capital Markets - Analyst : Good morning, John and Mike. Congrats on the refi. A couple of quick questions on the refi. Just during the call, I was scanning the 8-K, and I was wondering -- you said it's the new group. Did White Hat Magnetar, did they contribute any additional funds over and above what they had done previously? Also saw there's about [$1.4 million] warrants that were attached to the deal. I was wondering who those warrants went to. And you gave us a blended 14% rate. If you could just remind us how that compares to what it was under the old facility.

Question: Joe Gomes - Noble Capital Markets - Analyst : Okay. Thanks for that clarification. And two, one of the things that you'd mentioned, was the best challenges with the supply chain and getting products done, and that has pushed some of the -- we'll call some of the revenues to the right. And I'm just trying to get an idea of how long do you think this resolving the supply chain and giving the finished products. How long is that process going to take to get back to, let's call it a normalized rate?

Question: Joe Gomes - Noble Capital Markets - Analyst : Yeah, thank you for that. And then one of the big contracts on the global field services, I know, had been under protest. And I think there's been some issuances that maybe they had -- the protest have been denied. But maybe you just give us some update on where that contract stands today?

Question: Joe Gomes - Noble Capital Markets - Analyst : Okay. And when do you think you might start seeing revenues out of that then?

Question: Joe Gomes - Noble Capital Markets - Analyst : Okay. And then one last one for me, and I'll jump back in queue. So John, a lot of great news here with the refi finally done and continuing to move forward on adding new people, some major contract wins like Massachusetts. Any timeframe as to when they are going to remove the temporary tag? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 18, 2024 / 12:30PM, CMTL.OQ - Q3 2024 Comtech Telecommunications Corp Earnings Call

Question: Joe Gomes - Noble Capital Markets - Analyst : Great. Well, congrats again on getting the refi done. Look forward to getting back to business as normal, and I will allow someone else to ask some questions. Thank you.

Question: Mike Crawford - B. Riley Securities, Inc. - Analyst : Thank you. With the -- When in Massachusetts -- does that whole $140 million go into bookings already in this July fourth quarter?

Question: Mike Crawford - B. Riley Securities, Inc. - Analyst : And then regarding the unbilled receivables and how those will be declining in the next year, can we just walk through some of the mechanisms regarding that, maybe starting with troposcatters, for example? Time line from order to delivery to acceptance on a tropo product and maybe what relative contribution that section of unbilled receivables is on the balance sheet and maybe similar walk through on the other major items there.

Question: Mike Crawford - B. Riley Securities, Inc. - Analyst : Okay. That's great for the tropo. And what about for things like software delivered to telecom customers, where you -- you've been waiting for acceptance after it's been delivered?

Question: Mike Crawford - B. Riley Securities, Inc. - Analyst : Yeah, that would be great. And then just to be clear, this $11.9 million adjusted EBITDA number for 3Q with a similar expectation for 4Q, are those the numbers that will be used for the leverage covenant in your new bank facility?

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Good morning. Just to follow up on that last comment, when you look at staying in compliance with those covenants, obviously, this run rate would imply like either a step down in the level of debt or EBITDA growing from these levels. What is your view on that, on how you're going to without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 18, 2024 / 12:30PM, CMTL.OQ - Q3 2024 Comtech Telecommunications Corp Earnings Call stay in compliance? Are you expecting to liquidate those receivables and reduce the level of lending? Do you have a view on EBITDA maybe stepping up with some of these contracts kicking in 2025? How should we think about that?

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Okay. And then when you look at the disruptions in your business that you saw last quarter and this quarter, and I guess probably into next quarter a little bit, how much of that is just timing with the supply chain and getting the products out the door versus maybe lost business?

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Okay. When you think about alternative solutions that the customers delaying and waiting to see where you're at, how easy would it be for them to replace your solutions? Or -- I'm just trying to get a sense of maybe if they found -- were able to find another supplier or if they --? (multiple speakers)

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Great. And within the 911 renewals, what was the pricing like on those? Was there a step-down in pricing? Or how did those renegotiations go?

Question: Mike Crawford - B. Riley Securities, Inc. - Analyst : Thank you. Just on other growth drivers, so the global field services representative contract, is that still anticipated to grow to be as much as $100

Question: Mike Crawford - B. Riley Securities, Inc. - Analyst : Okay, thank you. And then the other one that we've been maybe more excited about is this EDIM modem that you're developing that really is the next generation of this EBEM modem that Viasat has generated about $1 billion of revenue on it over the last decade. I believe you're building the first articles there. What is the timeline on EDIM?