What changed in this filing

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Item 1. Business

2023-10-12 compared with 2022-09-29 · 120 added, 85 removed, 436 unchanged (32% of the section changed)

Founded in 1967, we are a leading global provider of next-generation 911 emergency systems ("NG-911") and secure wireless and satellite communications technologies.

We see these two end-markets as part of what Comtech has identified as the “Failsafe Communications Market.” This includes the critical communications infrastructure that people, businesses, and governments rely on when durable, trusted connectivity is required, no matter where they are – on land, at sea, or in the air – and no matter what the circumstances – from armed conflict to a natural disaster.

This includes the critical communications infrastructure that people, businesses, and governments rely on when durable, trusted connectivity is required, no matter where they are – on land, at sea, or in the air – and no matter what the circumstances – from armed conflict to a natural disaster.

Our solutions are designed to fulfill our customers’ needs for secure wireless communications in the most demanding environments, including those where traditional communications are unavailable or cost-prohibitive, and in mission-critical and other scenarios where performance is crucial.

We anticipate future growth in our business due to increasing demand for global voice, video and data usage.

We provide our solutions to both commercial and governmental customers.

We anticipate future growth in our business due to a trend of increasing demand for global voice, video and data usage in recent years, upgraded ground stations and related services resulting from the large quantities of satellites anticipated to be launched for new LEO and MEO constellations, digitization and virtualization of modems, the resurgence of troposcatter as a viable form of primary or backup communications, enhanced location positioning combined with data-rich geospatial intelligence, and the growth of 988 networks.

We provide our solutions to both commercial and governmental customers within the converging satellite and space communications and terrestrial and wireless networking markets.

In August 2022, we announced that Ken Peterman was appointed President and CEO.

Peterman’s significant experience in satellite technology and decades of experience with U.S.

government contracting is expected to enhance our efforts to continually improve commercial success and shareholder value.

To advance our CEO’s initiatives to further strengthen and grow our business, we continue to move forward on the operational and cultural transformation that we call "One Comtech."

Since being appointed President and CEO, Mr.

Peterman, along with his senior leadership team, has been driving transformational changes at Comtech to, among other things, integrate our individual businesses into two segments and improve operational performance.

This transformation has provided insight into opportunities to manage costs, streamline operations, improve efficiency, and accelerate decision making by eliminating management layers and other redundancies.

As part of our “One Comtech” initiative, we also celebrated the rebranding and launch of Comtech’s new logo and website, representing our commitment to delivering software-centric, cloud native communications solutions.

In fiscal 2023, we established EVOKE as Comtech’s innovation foundry, which is dedicated to creating and accelerating transformational changes in global technologies.

We believe that EVOKE will enhance our existing technologies and service offerings (e.g., cloud-native satellite ecosystems, 5G advanced services and “as-a-service” business models) as well as allow us to pioneer entirely new ideas and opportunities with the benefit of multiple perspectives, industry backgrounds and areas of expertise.

Since our launch of EVOKE, we have announced several technology partners, including Aarna Networks, Descartes Labs, Inc., Sirqul, Inc.

and WishKnish Corp.

By combining Aarna Networks’ technologies with Comtech’s Dynamic Cloud Platform, the companies anticipate enabling customers to easily add and manage a variety of open architecture cloud-based applications across private, hybrid and public networks, in both terrestrial and non-terrestrial environments.

We are working with Descartes Labs to infuse the power of artificial intelligence, machine learning, predictive intelligence and insight monitoring across Comtech’s product offerings.

Comtech and Sirqul are working on “Smart Operations,” where enterprises will be able to make business decisions with real time Internet of Things ("IoT") data.

Through our collective efforts, we are working to bring robust mobile, web, social, voice, IoT, and other technologies to a variety of global markets.

We are working in collaboration with WishKnish on integrating highly secure, flexible distributed ledger (blockchain) technologies across diverse commercial and government applications.

Business Segments

In the fourth quarter of fiscal 2022, we revised our business segments to better align them with end-markets for our products and services.

Our businesses have been re-organized into two new reportable segments:

“Satellite and Space Communications” and “Terrestrial and Wireless Networks.” All current and prior periods reflected in this Form 10-K have been presented according to these two new segments, unless otherwise noted.

For more information and for financial information about our business segments, including net sales, operating income, Adjusted EBITDA (a Non-GAAP financial measure), total assets, and our operations outside the United States, refer to " Notes to Consolidated Financial Statements - Note (11) Segment Information" included in "Part II - Item 8 - Financial Statements and Supplementary Data ."

We offer advanced secure wireless communications technologies founded on decades of expertise in the satellite communications and cellular markets.

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• Cybersecurity training, skills labs, and competency assessments for both technical and non-technical applications

Financial information about our business segments, including net sales, operating income, Adjusted EBITDA (a Non-GAAP financial measure), total assets, and our operations outside the United States, is provided in " Notes to Consolidated Financial Statements - Note (11) Segment Information" included in "Part II - Item 8.

Financial Statements and Supplementary Data ."

The markets and key technologies for each segment are further described below.

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Our Satellite and Space Communications segment has four product areas:

Satellite Modem and Amplifier Technologies, Troposcatter and SATCOM Solutions, Space Components and Antennas, and High-Power Amplifiers and Switches.

Satellite Modem and Amplifier Technologies, Troposcatter and SATCOM Solutions, Space Components and Antennas, and High-Power Amplifiers and Switch Technologies.

See "Notes to Consolidated Financial Statements - Note (18) – Subsequent Events" included in "Part II - Item 8.

Financial Statements and Supplementary Data" for information concerning the divestiture of our solid-state, RF microwave high-power amplifiers and control components product line.

Satellite Modem and Amplifier Technologies

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To date, although sales cycles are long, we have made good progress in securing several significant orders for ELEVATE™.

An increasing area of focus for many governments, including the United States Department of Defense ("DoD") and several coalition partners, is maturing satellite communications.

Many of our satellite communications products have been tested and certified for use by U.S.

and coalition military satellite communications ("MILSATCOM") assets, such as the Wideband Global SATCOM constellation.

We believe this provides us the opportunity to capture the increased demand for MILSATCOM programs.

We also provide rugged, highly efficient, and reliable amplifiers for commercial and military applications around the world.

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they support fixed traditional and direct-to-home broadcast, mobile news gathering, transportable and flyaway systems, secure high data rate communications, and broadband access over satcom.

These products include configurations that are formally qualified for use on aircraft.

These products include configurations that are formally qualified for use on aircraft and being installed as both retrofit and linefit initiatives.

Finally, we believe we are well-positioned in the millimeter wave ("mmWave") market and expect that market to continue to grow as new satellite constellations move into those higher, less crowded frequencies.

The Ka band LEO and MEO amplifiers that we design and manufacture for large commercial customers’ non-GEO constellations represent key strategic wins as we build position in higher frequency bands.

The Ka band Low Earth orbit ("LEO") and Medium Earth orbit ("MEO") amplifiers that we design and manufacture for large commercial customers’ non-GEO constellations represent key strategic wins as we build positions in higher frequency bands.

Troposcatter and SATCOM Solutions

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We believe we are a world leader in the design and supply of troposcatter equipment.

We have designed, manufactured, and delivered troposcatter systems (sometimes referred to as over-the-horizon ("OTH") microwave products and systems) for over fifty years.

We have designed, manufactured, and delivered troposcatter systems (sometimes referred to as over-the-horizon ("OTH") microwave products and systems) for well over fifty years.

Our OTH systems, which include our patented forward error correction technology, can transmit video and other broadband applications at high throughputs in the most demanding environments:

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Additionally, energy companies use our systems to enable communication links for offshore oil rigs and other remote locations, as well as for exploration activities.

The Comtech COMET™, introduced two years ago, is a rapidly deployable OTH microwave system that directly addresses a void in capabilities that have long been desired by tactical communications planners:

The Comtech COMET™ is a rapidly deployable OTH microwave system that directly addresses a void in capabilities that have long been desired by tactical communications planners:

low probability of intercept and low probability of detection (“LPI/LPD”), while providing high reliability, mission essential communications.

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Army’s AN/TSC-198 family of communication systems that are commonly referred to as "SNAP" (Secret Internet Protocol Router ("SIPR") and Non-secure Internet Protocol Router ("NIPR") Access Point) VSATs, support for the Army “SCOUT” (Scalable Class of Unified Terminals), and Army T2C2 (Tactical Command Communication).

We also provide sustainment services for the U.S.

Army’s Blue Force Tracking-1 ("BFT-1") system in addition to support for Army IP networks.

Our field support services include providing U.S.

Department of Defense ("DoD") personnel with curriculum development and training services to support cybersecurity workforce development.

Our field support services include providing DoD personnel with curriculum development and training services to support cybersecurity workforce development.

Space Components and Antennas

For over 45 years, we have been recognized as an industry leader and global supplier of high-reliability products and supply chain management and engineering services, supporting selection of space-qualified parts for satellite and launch vehicle tracking solutions geared for critical NASA programs as well as several international space and defense agencies.

National Aeronautics and Space Administration ("NASA") programs as well as several international space and defense agencies.

Our engineers are not only involved in the design of products, but our technical team is heavily involved with the customer development of electronic parts and testing specifications to assure capability, reliability and radiation tolerance to specific mission/project requirements both as an individual service and for Electrical, Electronic, and Electromechanical (“EEE”) parts supplied to our customers.

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Thousands of new satellites are reportedly being launched over the next several years, according to announcements by companies including Telesat Lightspeed, OneWeb, SpaceX Starlink, Amazon Kuiper and Viasat, which we believe will lead to increasingly complex satellite networks.

As service providers work to offer connectivity to these high-speed, high-bandwidth satellites and expand their networks to handle the demand for new LEO, MEO and HTS applications, we believe our ELEVATE ™ , Heights TM and UHP networking platforms, our solid-state amplifiers and our X/Y antennas will ultimately be incorporated into many new installations and equipment upgrades.

As service providers work to offer connectivity to these high-speed, high-bandwidth satellites and expand their networks to handle the demand for new LEO, MEO and HTS applications, we believe our ELEVATE TM , Heights TM and UHP networking platforms, our solid-state amplifiers and our X/Y antennas will ultimately be incorporated into many new installations and equipment upgrades.

We continue to provide modems and amplifiers to existing LEO and MEO communications satellite providers and expect to see growth in imaging satellites alongside commercial imaging constellations, including conventional, thermal, and hyperspectral.

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Comtech TDMA equipment is widely used in these applications, where it delivers superior network availability (by making use of geographical hub redundancy and other technologies), and high Quality of Service (“QoS”).

• Geospatial and Earth Observation:

led by the need to deliver near real time insights to government and commercial customers globally, the LEO operated Geospatial and Earth Observation satellite constellations have a driving need to gain access to their data at speed, and via trusted U.S.

We believe Comtech is uniquely positioned to stand our Geospatial and Earth Observation services on the shoulders of our globally proven technologies to connect critical services for LEO based satellite communications operators.

In this way, we are able to position fixed ground services, transportable kits and, by leveraging our partners in EVOKE, data processing and analytics at the edge to support our Geospatial and Earth Observation customers going forward.

Terrestrial and Wireless Networks Segment

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and abroad that have a need to determine subscriber location within a network or to facilitate messaging services.

In 2021, we were recognized by Frost & Sullivan, a leading third-party research firm, for registering the most significant year-over-year market share increase among all NG-911 primary contract holders.

According to Frost & Sullivan, a leading third-party research firm, we were the second leading NG-911 primary contract holder at year-end 2022 with an estimated market share of 22.3%.

Our direct NG-911 contracts covered a population of over 56 million at the end of 2022.

As such, we believe that we are a leader in public safety communication and location technologies.

The Terrestrial and Wireless Networks segment is organized into four product areas:

Next Generation 911 & Call Delivery, Solacom Call Handling Solutions, Trusted Location and Messaging Solutions, and Cyber Security Training & Services.

The Terrestrial and Wireless Networks segment is organized into three product areas:

Next Generation 911 & Call Delivery, Solacom Call Handling Solutions, and Trusted Location and Messaging Solutions.

Next Generation 911 & Call Delivery

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Offering a bird's-eye view of integrated data, the SmartResponse TM solution empowers first responders to ensure appropriate resources are on the scene and to better serve the public in emergency situations.

Cyber Security Training & Services

During the first quarter of fiscal 2022, Comtech launched a new cybersecurity brand, CyberStronger™, to provide cybersecurity solutions and services tailored to threat monitoring and assessment, training, and workforce development.

Offerings include cyber threat detection and management, off-the-shelf and custom training, hands-on skills labs, and competency-based assessments mapped to cybersecurity job roles.

The CyberStronger™ solutions also include the CYBRScore® set of products that provide hands-on assessments and training to upskill and reskill cybersecurity workforces.

These solutions were created by a team of former national intelligence community members who have the practical cybersecurity experience and abilities required to meet the demanding needs of Comtech’s customer base which includes government entities, large universities, and enterprise-level corporations.

Our offerings are suitable for both technical and non-technical teams to close the skills gap in the cyber security field and also provide continuous feedback and evidence to the organizations about their teams’ proficiency.

Our PerformanScore® is a performance-based scoring platform that uniquely and adaptively measures skills across a range of credible responses to a defined set of tasks, allowing for a consistent and immediate evaluation.

Terrestrial and Wireless Networks:

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We believe we service a significant portion of the carrier market for 911 cellular call routing applications, along with one other leading competitor.

With the advent of 5G networks, new network-based positioning technologies are poised to deliver opportunities thanks to the ongoing digital transformation of multiple industry verticals, including the Public Safety, Transportation, Manufacturing, Healthcare and Retail industries.

In addition to our growth in core 911 services, the expected expansion of 988 networks in fiscal 2024 and beyond across the United States is expected to have a positive impact on our business.

988 services provide free and confidential support for people in distress, suicide prevention and crisis resources.

We believe Comtech is uniquely positioned to expand our 911 services into 988 services and help mitigate some of the core challenges the network is currently experiencing with area code specific call routing.

By connecting the 988 services with Comtech’s existing 911 infrastructure, the location services critical to dispatch personnel can be improved for 988 exponentially.

In the growth area of 5G networks, new network-based positioning technologies are poised to deliver opportunities thanks to the ongoing digital transformation of multiple industry verticals, including the Public Safety, Transportation, Manufacturing, Healthcare and Retail industries.

As these industries increasingly rely on data from connected devices, using location information in real-time is expected to enhance existing business processes and outcomes as well as end user experiences.

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MNOs can use this platform for location accuracy to support a wide variety of use cases, including public safety, location intelligence, network optimization and big data analytics.

On the legacy front, our LBS platform is compatible within 2G through 4G wireless networks, as well as an enabler to the MNOs to seamlessly migrate to cloud native environments, as they start their migrations to 5G.

• Comtech INSIGHTS™ LightSource™:

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• Wireless Emergency Alerts (“WEA”):

WEA, also known as Commercial Mobile Alerts System (“CMAS”) in the US, enable authorized officials to inform the public about life-threatening events by automatically delivering emergency alerts to mobile devices (including roaming users) via the government alert gateway.

WEA, also known as Commercial Mobile Alerts System (“CMAS”) in the U.S., enable authorized officials to inform the public about life-threatening events by automatically delivering emergency alerts to mobile devices (including roaming users) via the government alert gateway.

Using standardized infrastructure, ensuring compliance with government regulations globally, our patented technology facilitates the origination and accurate delivery of geo-targeted emergency alerts, empowering emergency services providers to better serve the public.

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We believe we have an advantage in having identified this convergence, and in combining our native expertise in both to develop innovative new products and solutions to meet growing customer demands.

Broadly, the increasing digitization of people and businesses, and the ongoing migration to the cloud, means a growing reliance on communications and connectivity, and a corresponding increase in the volumes of data transmission.

We believe this is a long-term secular opportunity for Comtech given our market-leading positions in, and understanding of, the fast-evolving Failsafe Communications markets.

Broadly, the increasing digitalization of people and businesses, and the ongoing migration to the cloud, means a growing reliance on communications and connectivity, and a corresponding increase in the volumes of data transmission.

We believe this is a long-term secular opportunity for Comtech given our market-leading positions in, and understanding of, these fast-evolving markets.

We are watching in real-time as the once clear line separating terrestrial and non-terrestrial communications networks is dissolving.

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People, devices, and machines need constant connectivity, regardless of whether they are proximate to a cellular tower.

Because of this, satellite communications are increasingly bridging gaps created by challenging geographies, or a lack of terrestrial infrastructure altogether.

Because of this, satellite communications are increasingly bridging gaps created by challenging geographies, failure of a terrestrial infrastructure due to natural disasters, or a lack of terrestrial infrastructure altogether.

Comtech is increasingly delivering solutions to companies and countries seeking to bridge these gaps, whether across legacy 4G networks, or through the introduction of 5G networks, as operators seek ways to optimize implementation, control costs, and mitigate security risks.

We expect the convergence of terrestrial and non-terrestrial networks to continue, leveraging the increasing numbers and density of satellite constellations to meet the growing terrestrial demand to connect and move more data, more quickly, reliably, and efficiently than ever.

For critical networks such as those for first responders, defense or intelligence users having the resiliency and redundancy of both a terrestrial/wireless backbone and a satellite communications layer increases the opportunity for always-on, always-available connectivity.

Comtech is uniquely positioned to expand into this area.

Our Diverse Global Customer Base

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Representative Customers

Satellite systems integrators, wireless and other communication service providers, and broadcasters, such as DIRECTTV Group and EchoStar Corporation

Satellite systems integrators, wireless and other communication service providers, and broadcasters, such as DIRECTTV Group

Army, the U.S.

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Medical equipment companies, such as Varian Medical Systems, Inc., and aviation industry system integrators such as Collins Aerospace (a subsidiary of Raytheon Technologies Corporation)

End-customers also include BT Group plc., China Mobile Limited, Claro Argentina, Intelsat S.A., JAXA, NASA, QUALCOMM Incorporated, SED Systems (a division of Calian Ltd.), SES S.A.

End-customers also include China Mobile Limited, Claro Argentina, Intelsat S.A., JAXA, NASA, SED Systems (a division of Calian Ltd.), SES S.A.

and Speedcast International Limited

Oil companies such as Shell Oil Company and PETRONAS

state and local governments, such as the Commonwealth of Massachusetts, the Commonwealth of Pennsylvania and the states of Arizona, Iowa, Maine, New Hampshire, South Carolina, Vermont and Washington

state and local governments, such as the Commonwealth of Massachusetts, the Commonwealth of Pennsylvania and the states of Arizona, Iowa, Maine, Ohio, New Hampshire, South Carolina, Vermont and Washington

End-customers also include AT&T Inc., Lumen Technologies, Inc.

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In fiscal 2023, we achieved consolidated net sales of $550.0 million and Adjusted EBITDA of $53.5 million.

As more fully described elsewhere in this Form 10-K, we navigated the challenges of operating our global business during the period where COVID-19 continues to impact many of our customers and suppliers.

Like businesses everywhere, we confront one of the most difficult operating environments in memory, as the global economy struggles to find its footing amidst a pandemic, geopolitical conflict, surging inflationary pressures, changes in government spending priorities, and adverse supply chain disruptions.

Nevertheless, in fiscal 2022, we continued to strengthen the Comtech brand and its positioning within the key markets that we serve.

We believe that as COVID-19 subsides and the global economy recovers, our business performance in future periods will improve from current levels.

As more fully described elsewhere in this Form 10-K, in fiscal 2023 we navigated the challenges of operating our global business during a period where business conditions continue to be challenging, and the operating environment is largely unpredictable, including factors such as inflation, rising interest rates, the repercussions of the military conflict between Russia and Ukraine and a potential global recession.

Order and production delays, disruptions in component availability, increased pricing both for labor and parts, lower levels of factory utilization and higher logistics and operational costs are also continuing to impact our business.

Nevertheless, despite these business conditions and resulting challenges and although we anticipate some variability from time to time as we move through our One Comtech transformational change, we believe as the global economy continues to recover, our business performance in future periods will continue to improve from current levels.

Our Business Outlook for Fiscal 2024 is discussed further in Part II – “Item 7.

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Our Internet website is www.comtech.com , at which you can find our filings with the Securities and Exchange Commission ("SEC"), including investor letters, press releases, annual reports, quarterly reports, current reports, and any amendments to those filings.

We also make announcements regarding company developments and financial and operating performance through our blog, Signals, at www.comtech.com/comtech-signals .

We also make announcements regarding company developments and financial and operating performance through our blog, Signals, at www.comtech.com/signals .

We also use our website to disseminate other material information to our investors (on the Home Page and in the "Investor Relations" section).

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We also use social media channels to communicate with customers and the public about our Company, our products, services, and other issues, and we use social media and the Internet to communicate with investors, including information about our stockholder meetings.

Information and updates about our Annual Meetings will continue to be posted on our website at www.comtech.com in the "Investor Relations" section.

Information and updates about our Annual Meetings will continue to be posted on our website at www.comtech.com in the "Investors" section.

None of the information on our website, blog or any other website identified herein is incorporated by reference in this annual report and such information should not be considered a part of this annual report.

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Material acquisitions in the past several years include:

On January 27, 2020, we completed the acquisition of CGC Technology Limited ("CGC"), a small privately held company located in the United Kingdom.

CGC is a leading provider of high-precision full-motion fixed and mobile X/Y satellite tracking antennas, reflectors, RF feeds, radomes and other ground station equipment for customers around the world.

The acquisition brought established relationships with several top-tier European aerospace companies and other government entities, and we expect it to allow us to participate in the anticipated growth in the number of LEO and MEO satellite constellations.

The aggregate purchase price for accounting purposes for the acquisition of CGC was $23.7 million and CGC was fully integrated into our Satellite and Space Communications segment.

On March 2, 2021, we completed our acquisition of UHP Networks Inc.

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government and large mobile wireless operators) to market our technology solutions.

In fiscal 2023, we expect to continue expanding our social media and Internet presence and developing an updated marketing and branding strategy.

In fiscal 2024, we expect to continue expanding our social media and Internet presence and further developing an updated marketing and branding strategy.

We are pre-qualified as an approved vendor for certain government contracts.

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Sales to U.S.

government customers include sales to the U.S.

Department of Defense ("DoD"), intelligence and civilian agencies, as well as sales directly to or through prime contractors.

government customers include sales to the DoD, intelligence and civilian agencies, as well as sales directly to or through prime contractors.

Domestic sales include sales to commercial customers, as well as to U.S.

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Except for the U.S.

government, there were no customers that represented more than 10.0% of consolidated net sales during fiscal 2020.

government and Verizon, there were no other customers that represented more than 10.0% of consolidated net sales during fiscal 2023, 2022 and 2021.

International sales for fiscal 2023, 2022 and 2021 (which include sales to U.S.

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During fiscal 2023, 2022 and 2021, we were reimbursed by customers for such activities in the amounts of $14.0 million, $9.8 million and $13.6 million, respectively.

During fiscal 2022 and 2021, we incurred $1.2 million and $0.3 million, respectively, of strategic emerging technology costs for next-generation satellite technology to advance our solutions offerings to be used with new broadband satellite constellations.

We are evaluating this new market in relation to our long-term business strategies, and likely to incur additional costs in fiscal 2023.

During fiscal 2023, 2022 and 2021, we incurred $3.8 million, $1.2 million and $0.3 million, respectively, of strategic emerging technology costs for next-generation satellite technology to advance our solutions offerings to be used with new broadband satellite constellations.

We are evaluating this new market in relation to our long-term business strategies, and expect to incur additional costs in fiscal 2024.

Intellectual Property

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Listed below, in alphabetical order, are some of our competitors in each of our two business segments:

Satellite and Space Communications – ACTIA Group, Advantech Co., Ltd., Aethercomm Inc., Agilis Satcom, AMERGINT Technologies, Inc., AnaCom, Inc., Codan Limited, CPI International, Inc., Datum Systems, Inc., dB Control Corp.

(a subsidiary of HEICO Corp.), ENENSYS Technologies, ETM Electromatic Inc., Gilat Satellite Networks Ltd., Empower RF Systems, Inc., Envistacom, LLC, General Dynamics Corporation, Hughes Network Systems, LLC (a subsidiary of EchoStar), KVH Industries, Inc., L3Harris Technologies, Inc., Mission Microwave Technologies, LLC, ND Satcom GmbH, Panasonic Corporation, Paradise Datacom Ltd.

Satellite and Space Communications – ACTIA Group, Advantech Co., Ltd., Aethercomm Inc.

(recently acquired by Frontgrade Technologies, a portfolio company of Veritas Capital), Agilis Satcom, AMERGINT Technologies, Inc., Amkom Design Group Inc., AnaCom, Inc., Codan Limited, CPI International, Inc., Datum Systems, Inc., dB Control Corp.

(a subsidiary of HEICO Corp.), ENENSYS Technologies, ETM Electromatic Inc., Gilat Satellite Networks Ltd., Empower RF Systems, Inc., General Dynamics Corporation, Hughes Network Systems, LLC (a subsidiary of EchoStar), KVH Industries, Inc., Kratos Defense and Security Solutions (Including Kratos RT Logic and Avtec Systems, Inc.), L3Harris Technologies, Inc., Mission Microwave Technologies, LLC, ND Satcom GmbH, Novelsat LTD, Panasonic Corporation, Paradise Datacom Ltd.

(a subsidiary of Teledyne Technologies Incorporated), Raytheon Technologies Corporation, SatixFy Israel Ltd., ST Engineering iDirect, Inc.

(including Newtec), Terrasat Communications Inc., and ViaSat, Inc.

Terrestrial and Wireless Networks – AT&T Inc., Atos, Bandwidth.com, CalAmp Corp., Carbyne, Central Square Technologies, 8x8, Inc., Everbridge, Inc., Google Inc.

(a subsidiary of Alphabet Inc.), Here Technologies, Immersive Labs, INdigital, Intrado Corporation (formerly West Corporation), LM Ericsson, Lumen Technologies, Inc.

(formerly CenturyLink, Inc.), Mobile Arts AB, Motorola Solutions, Inc., NGA911, Nokia Networks (a subsidiary of Nokia Corporation), RapidDeploy, Inc., Rave Mobile Safety, Sinch AB (Inteliquent), Synergem Technologies, ThriveDX, and TomTom N.V.

Terrestrial and Wireless Networks – AT&T Inc., Atos, Bandwidth.com, Carbyne, Central Square Technologies, 8x8, Inc., Everbridge, Inc., Google Inc.

(a subsidiary of Alphabet Inc.), Here Technologies, Hexagon AB, Immersive Labs, INdigital, Intersec, Intrado Corporation (formerly West Corporation), LM Ericsson, Lumen Technologies, Inc.

(formerly CenturyLink, Inc.), Mobilaris AB, Mobile Arts AB, Motorola Solutions, Inc., NGA911, Nokia Networks (a subsidiary of Nokia Corporation), Polaris Wireless, RapidDeploy, Inc., Rave Mobile Safety, Sinch AB (Inteliquent), Synergem Technologies, SS8, ThriveDX, TomTom N.V., Versaterm Public Safety Inc., WestTel, and Zetron.

We believe that competition in all our markets is based primarily on technology innovation, product performance, reputation, delivery times, customer support and price.

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Human Capital

We realize that our employees are one of our most valuable assets and believe our success depends on the talent we attract and retain, which is why we are developing what we call our People Strategy.

We are passionate about building meaningful employee engagement and happiness in a variety of ways that will be addressed in our People Strategy, including providing a foundation for a diverse, inclusive and equitable workplace where employees feel they belong;

developing and promoting talent;

Our employees are one of our most valuable assets and we believe our success depends on the talent we attract and retain, which is why we make our People Strategy one of our top priorities.

We are passionate about building meaningful employee engagement and happiness through a variety of programs, initiatives, and other opportunities that are addressed in our People Strategy.

As part of this strategy, we are providing a foundation for a diverse, inclusive and equitable workplace where employees feel they belong, their views are valued, and they are empowered to pursue opportunities they are passionate about.

Our People Strategy is also focused on developing and promoting talent;

supporting a competitive benefits program;

and enforcing the importance of our employees’ health, safety and wellness.

and emphasizing the importance of our employees’ health, safety and wellness.

Diversity, Equity, Inclusion and Belonging

We believe a diverse, equitable, inclusive workplace is critical to our ability to develop innovative solutions and is key to the future of our success.

We encourage employees to be inspired and strive for them to feel like they belong.

We focus on expanding our diverse workforce by reaching out to institutions promoting the employment of minorities, attending recruiting events aimed at attracting talent of diverse heritage and veteran backgrounds, as well as by considering diversity of our workforce during our talent, promotion, and succession planning.

Through these and other efforts, during fiscal 2022, two additional female executives were hired onto our executive leadership team, including our first female Chief Operating Officer.

Three female professionals were also recently appointed to our Board of Directors ("Board") (which currently consists of 37.5% female and 62.5% male Board members).

Additionally, in fiscal 2022, a member of our executive leadership team was recognized as an honoree for diversity in business based on such individual's efforts in our organization and the community.

Our leadership team identified several company-wide diversity initiatives such as celebrating Black History Month, Asian American Pacific Islander Heritage Month, International Women’s Day and Pride Month, where employees and their families are encouraged to participate, celebrate, and showcase their views, culture, and history on our social media and company-wide communication platforms.

When unique stories are celebrated, employees feel connected in meaningful ways and support each other to reach our full potential.

We believe a diverse, equitable, inclusive workplace is central to our ability to innovate and deliver substantial value for our customers as well as contribute to our future growth and continued success.

We encourage employees to be inspired and strive for them to feel like they belong which is communicated through blogs, internal messages, activities, engagement opportunities, and other employee participation initiatives featured on our redesigned company-wide Intranet.

We focus on expanding our diverse workforce by reaching out to institutions promoting the employment of minorities;

attending recruiting events aimed at attracting talent of diverse heritage and veteran backgrounds;

and considering diversity of our workforce during our talent, promotion, and succession planning.

Through these and other efforts, during fiscal 2023, we successfully launched The Exchange program, which brings women of all ages together to spark new ideas, inspire the next generation of women leaders, and create opportunities for current leaders to learn from future leaders.

Our leadership team also identified several company-wide diversity initiatives such as celebrating Black History Month.

One of our key efforts during Black History Month was implementing the first annual Black History Month webinar series, which featured discussions from a diverse set of renowned African American leaders.

In addition, we have placed an emphasis on celebrating and recognizing other diversity observances including Asian American Pacific Islander Heritage Month, International Women’s Day, Breast Cancer Awareness Month and Pride Month, among others.

Beyond our internal messages and educational efforts, we encouraged employees and their families to participate, celebrate, and showcase their views, culture, and history by sharing their stories and inspirations on our social media channels and our company-wide Intranet.

For our Veterans, we celebrated “Honor Week” by recognizing each of the armed forces through various engagement activities.

Among other fiscal 2023 highlights, we launched an annual employee recognition program, which included our “Above and Beyond” award.

This employee recognition program aims to showcase and celebrate our employees’ volunteerism within their communities and award them for their outstanding efforts.

To unify the enterprise and showcase our diverse cultures, we also created a company-wide cookbook highlighting family recipes from employees around the globe.

Ultimately, when unique stories are celebrated, employees feel connected in meaningful ways and support each other, which can help enhance our company culture and encourage employees to reach their full potential.

Employee Workforce as of July 31, 2023

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We recognize and reward performance while continually developing, engaging and retaining high-performing employees.

We have made significant investments to provide ongoing training and career development by offering courses on our online learning management system.

We have made significant investments to provide ongoing training and career development opportunities by offering courses on our online learning management system.

We offer job-specific skills training to promote and develop advancement within the organization and to enhance skills.

Training in and compliance with our Standards of Business Conduct and Trade and FCPA compliance is also mandatory among our employees.

Through certain government contracts that we participate in, we partner with our end customer to provide enlisted, active military personnel (whose service is expected to end within 6 months) onsite training to help them with a successful transition to a civilian life.

Our Standards of Business Conduct, Cybersecurity, and Trade and Foreign Corrupt Practices Act ("FCPA") compliance trainings are also mandatory for our employees.

Through certain government contracts that we participate in, we partner with our end customers to provide enlisted, active military personnel (whose service is expected to end within 6 months) onsite training to help them with a successful transition to a civilian life.

Also, in an effort to retain and attract new talent, we partner with local universities to hire interns throughout our organization.

During fiscal 2022, we engaged several interns throughout the company with interests ranging from procurement, engineering, and legal practice.

During fiscal 2023, we launched a robust internship program that assigned impactful projects to interns, partnered them with a mentor, and provided them insight to our culture and leadership team through weekly lunch and learns.

At July 31, 2023, we had 1,718 employees (including temporary employees and contractors), 1,132 of whom were engaged in production and production support, 305 in research and development and other engineering support, and 281 in marketing and administrative functions.

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based employees are represented by a labor union.

Of our 1,993 employees, 496 employees are based outside of the United States, including 148 employees in the United Kingdom, 139 employees in India and 138 employees in Canada.

Of our 1,718 employees, 384 employees are based outside of the United States, including 123 employees in Canada, 120 employees in the United Kingdom, and 91 employees in India.

We believe that our employee relations are good.

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We strive to maintain a robust health, safety and wellness program to ensure a healthy work environment, promote workforce resiliency, and enhance business value.

We encourage employee participation to identify opportunities for improvement and review and monitor our performance with safety committees on the local level.

We encourage employee participation to identify opportunities for improvement and review and monitor our performance with safety committees at our local sites.

Local safety committees identify safety programs and ensure completion of all training and target learning objectives.

We continue to review our business models to support flexible working arrangements, where possible, to meet the needs of our employees and our business.

We continue to review CDC guidelines to monitor safety measures in all facilities in light of the continuing COVID-19 pandemic.

Employee wellness is important to Comtech.

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Assistance is available 365 days per year, 24 hours per day.

As part of our budgeted wellness fund this year, we provided employees with a sun protection kit at the start of the summer season to promote health, safety, and well-being outside of work.

We rigorously review our benefit and compensation plans to maintain competitive packages that reflect the wellness needs of our workforce and the marketplace.

These programs include 401(k) plans, health and welfare benefits, among many others.

These programs include 401(k) plans, comprehensive health packages, and welfare benefits, among many others.

We support pay equity for all employees within the same geographic area, experience level, and performance standards.

We encourage our employees to respect our environment.

To compound these efforts, we offer recycling bins at our facilities and encourage employees to use environmentally friendly commuting options such as mass transit (providing company sponsored mass transit cards) and share ride programs.

This year, we also provided enhanced benefits to our employees without increasing employee payroll contributions.

Sustainability sits at the core of who we are as a company and implementing a comprehensive sustainability strategy remains one of our top priorities.

As we continue to move forward with our One Comtech transformation, we are enhancing sustainable operations across the enterprise.

In July 2023, we selected a solution provider for carbon accounting software and services to enable us to quantify, monitor, and manage the carbon footprint of our operations, and use data-based decision-making to develop targeted carbon reduction projects.

We enhanced the sustainability of our operations in Arizona by completing the relocation to our new 146,000 square foot facility in Chandler, Arizona and exiting three buildings in Tempe, Arizona.

Though the facility in Chandler, Arizona provides additional space, energy use for the facility is expected to be approximately twenty percent less than our prior buildings in Tempe, Arizona.

This reduction is attributable in part to the newer building, LED lighting upgrades, and some newer equipment.

Additionally, a diesel-fueled generator is no longer required for back-up power, as the Chandler, Arizona facility has redundant power sources via connection to two electrical substations.

We offer our employees incentives to promote greener commuting options such as company-sponsored mass transit cards and rideshare programs.

Where appropriate, we also consider work from home arrangements to eliminate commuting altogether.

In 2022, we celebrated Earth Day in our company by encouraging our global employees to participate in environmentally-focused initiatives and then share their activities on social media.

fiscal 2023, we celebrated Earth Day in our company by encouraging our global employees to participate in environmentally-focused initiatives and then share their activities on social media.

We are developing a company-wide Environmental, Health, and Safety ("EHS") Management System to foster a culture of continuous improvement and to engage employees at all levels of the organization in the prevention of work-related injuries and illnesses, and minimization of environmental impacts.

We are committed to providing a workplace which values the health, safety, and well-being of our employees, contractors, and visitors to our facilities.

Government Contracts and Security Clearances

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Individual agencies can also have acquisition regulations.

For example, the Department of Defense implements the FAR through the Defense Federal Acquisition Regulation supplement (commonly known as "DFARs").

For example, the DoD implements the FAR through the Defense Federal Acquisition Regulation supplement (commonly known as "DFARs").

For all Federal government entities, the FAR regulates the phases of any product or service acquisition, including:

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laws may be materially adversely affected.

In addition, we are subject to the Foreign Corrupt Practices Act ("FCPA") and other local laws that generally bar bribes or unreasonable gifts to foreign governments or officials.

In addition, we are subject to the FCPA and other local laws that generally bar bribes or unreasonable gifts to foreign governments or officials.

Violations of these laws or regulations could result in significant sanctions, including disgorgement of profits, fines, and criminal sanctions against us, our officers, our directors, or our employees, more onerous compliance requirements, more extensive debarments from export privileges or loss of authorizations needed to conduct aspects of our international business.

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Efforts to comply with this SEC rule have resulted in additional costs to us and, we believe, to our suppliers.

As such, the availability of raw materials used in our operations could be negatively impacted and/or raw material prices could increase.

As such, the availability of raw materials used

in our operations could be negatively impacted and/or raw material prices could increase.

Further, if we are unable to certify that our products are conflict free, we may face challenges with our customers, which could place us at a competitive disadvantage and could harm our reputation.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business