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Item 1. Business

2024-10-30 compared with 2023-10-12 · 302 added, 249 removed, 307 unchanged (64% 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.

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 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.

Founded in 1967, we have a longstanding history of providing critical communications infrastructure technology and solutions to customers around the world.

We serve two core end-markets:

secure satellite and wireless communications via our Satellite and Space Communications segment, and next-generation 911 and public safety via our Terrestrial and Wireless Networks segment.

In both cases, we are at the forefront of the technologies that solve extraordinarily complex communications problems – whether it’s a 911 call captured, routed, and data-enhanced to optimize the public safety result in situations where every second matters, or providing communications infrastructure that ensures people, businesses, and governments can connect anywhere on earth, under any conditions – including on the battlefield.

We believe the demand for more, and better, connectivity is only growing as more devices become connected via the cloud, as growing constellations of communications satellites enable ubiquitous connectivity, and more data is created, shared and acted upon by increasingly powerful tools (including AI).

This demand will come from government and commercials customers alike, as both private enterprises and government actors increasingly see the need for, and value of, next-generation communications capabilities.

Fiscal 2024 marked a year of change for our organization.

Our fiscal 2024 results were impacted by refinancing and liquidity headwinds, which in turn weighed on our supply chain, and lengthened product development and delivery cycles.

Despite this commercial overhang, both of our business segments performed in terms of winning business.

The Satellite and Space Communications segment secured competitive contracts on next-generation modem platforms with government customers, such as the Enterprise Digital Intermediate Frequency Multi-Carrier (“EDIM”) modem contract with the U.S.

Army and a sole-source follow-on contract to support the U.S.

Air Force and Army Anti-Jam Modem (“A3M”) initiative.

We concluded a significant product R&D cycle, culminating with the launch in September 2024 of our new Digital Common Ground (“DCG”) portfolio of modems, which we believe will provide our Satellite and Space Communications segment with a significant technology advantage.

The DCG family of products are expected to provide our customers with truly next-generation capabilities, including software defined, virtualized communications networks.

Additionally, over the course of fiscal 2024, we continued to review our operations, streamlining under-performing legacy products, lines of business and/or legacy growth initiatives that have not met our return expectations, or are no longer core to our strategic plans.

For example, in November 2023, we announced the divestiture of our Power Systems Technology solid-state power amplifier product line to Stellant Systems, Inc.

More recently, we re-evaluated our operations at our Basingstoke facility in the UK and determined the path to profitable operations was both unclear and expensive.

As a result, we made the decision to exit this product line.

Our Terrestrial and Wireless Networks segment underwent a transformation of its own in fiscal 2024.

Led by Jeff Robertson, who joined Comtech as Terrestrial and Wireless Networks’s President in March 2024, Terrestrial and Wireless Networks saw improved profitability and achieved a book-to-bill ratio of 1.70x in fiscal 2024.

The segment also delivered a strong win rate for major public safety projects, as evidenced through more than doubling year-over-year bookings of orders for next-generation solutions.

The Terrestrial and Wireless Networks segment recorded multiple key wins, including multi-year renewals for maintenance of NG-911 systems with longstanding customers, such as the Commonwealth of Massachusetts, the State of Washington and the North Central Texas Emergency Communications District.

Comtech exited fiscal 2024 with a record funded consolidated backlog of $798.9 million.

Amended Credit Agreement and New Subordinated Term Loan Facility

While revenue generation was healthy, and we were able to grow our backlog, our Adjusted EBITDA in the fourth quarter of fiscal 2024 was significantly below expectations primarily due to underperformance in our Satellite and Space Communications segment, causing us to enter into an amendment to our credit facility, dated June 17, 2024.

Among other things, the amendment waives certain defaults or events of default in connection with certain covenants, including the Net Leverage Ratio and Fixed Charge Coverage Ratio covenants for the fourth quarter of fiscal 2024.

Additionally, the amendment added a consent right that limits our borrowing capacity under the revolver portion of our credit facility.

To eliminate the event of default, address the reduced borrowing capacity and bolster liquidity, we entered into a new $25.0 million subordinated unsecured term loan facility with the existing holders of our convertible preferred stock.

Additional information related to the amended credit facility and new subordinated unsecured term loan facility can be found in a Form 8-K that was filed with the Securities and Exchange Commission ("SEC") on October 17, 2024, as well as throughout this Form 10-K.

Transformation Strategy to Become a Pure-Play Satellite and Space Communications Company

At the beginning of fiscal 2024, we made a commitment to our shareholders to be a more forward-looking organization.

To that end, on October 17, 2024, we announced a transformation strategy to re-shape our Company as a pure-play satellite and space communications company, which we believe will unlock, create and deliver value to our shareholders over time.

Ongoing and future actions supporting this transformation strategy include:

• An exploration of strategic alternatives for our Terrestrial and Wireless Networks segment, which is well underway;

• The pursuit of further portfolio-shaping opportunities to enhance profitability, efficiency and focus;

• The implementation of additional operational initiatives to achieve profitable results from operations and to align our Company's go-forward cost structure with a pure-play focus on satellite and space communications.

In combination, we expect these three complimentary initiatives to create a pure-play leader in a large and growing market.

As a U.S.-based provider of modems and high-power amplifiers, and a market leader in troposcatter technologies, we have a history of delivering mission-critical satellite and communications solutions for government and commercial customers.

Our goal is to create a competitive, focused and efficient business delivering sustainable and profitable growth while providing customers with best-in-class satellite and space communications infrastructure solutions.

Business Segments

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

We believe these markets are undergoing a period of long-term growth, reinvestment, and rapid technological change.

We manage our business through two reportable operating segments:

Satellite and Space Communications and Terrestrial and Wireless Networks.

Our senior management team supports these business segments by, among other things, actively seeking to identify and leverage synergies that exist between the segments, including in areas such as manufacturing, technology, sales, marketing, customer support and finance.

The diagram below summarizes our key products, systems, and services by our two reportable operating segments:

Satellite and Space Communications Segment

(Approximately 61% of fiscal 2023 net sales) Terrestrial and Wireless Networks Segment

(Approximately 39% of fiscal 2023 net sales)

• Satellite ground station technologies, services and system integration that facilitate the transmission of voice, video and data over GEO, MEO and LEO satellite constellations, including solid-state and traveling wave tube power amplifiers, modems, VSAT platforms and frequency converters

• Satellite communications and tracking antenna systems, including high precision full motion fixed and mobile X/Y tracking antennas, RF feeds, reflectors, and radomes

• Over-the-horizon microwave equipment that can transmit digitized voice, video, and data over distances up to 200 miles using the troposphere and diffraction, including the Comtech COMET TM

• Solid-state, RF microwave high-power amplifiers and control components designed for radar, electronic warfare, data link, medical and aviation applications

• Procurement and supply chain management of high reliability EEE parts for satellite, launch vehicle and manned space applications

• Field support sustainment services and technology insertion services primarily supporting tactical VSAT systems, Blue Force Tracking Systems and cybersecurity training services

• Wireless/VolP 911 location and routing services to connect emergency calls to Public Safety Answering Points

• SMS Text to 911 services, providing alternate paths for individuals who need to request assistance (via text messaging) a method to reach Public Safety Answering Points

• 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 Public Safety Answering Points

• Wireless emergency alerts solutions for network operators

• Software and equipment for location-based and text messaging services for various applications, including for public safety, commercial and government services

• 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.

We operate two core businesses:

Satellite and Space Communications, and Terrestrial and Wireless Networks, each of which we believe are serving end markets themselves undergoing a period of long-term growth, reinvestment and rapid technological change.

Our Satellite and Space Communications segment is one of a limited number of U.S.-based providers of modems and high-power amplifiers, a market leader in troposcatter technologies, and serves some of the world’s largest defense contractors and allied foreign governments, as well as multiple U.S.

government agencies, including branches of the U.S.

Armed Forces, U.S.

Department of Defense (“DoD”) and U.S.

Space Force (“USSF”), among others.

Our Terrestrial and Wireless Networks segment is a leading provider of next generation 911 (“NG-911”) infrastructure and solutions for state and local governments and carriers.

Satellite and Space Communications Segment Terrestrial and Wireless Networks Segment

• Contributed approximately 60% of fiscal 2024 net sales

• Satellite Modems and Amplifiers:

One of the only U.S.-based providers of modems and high-power amplifiers, facilitating the transmission of voice, video and data over GEO, MEO and LEO satellite constellations

• Troposcatter Technologies:

A global leader in troposcatter technologies, capable of securely transmitting digitized voice, video, and data over distances up to 200 miles, with strong market share in existing C-band and X-band troposcatter systems worldwide

• Government Services:

Provides specialized onsite and remote professional engineering and training / support services for U.S.

government customers

• Space Components:

Specializes in delivering components for antennas and high-reliability electronic components and engineering services for space programs

• Customers include the world’s largest defense contractors, allied foreign governments, as well as multiple U.S.

government agencies (including all branches of the U.S.

Armed Forces)

• Contributed approximately 40% of fiscal 2024 net sales

• Next-Generation 911 Solutions:

we provide emergency call routing, location validation, policy-based routing rules, logging, and security functionality

• Global Carrier Location and Messaging Services:

Software and equipment for location-based and text messaging services for carriers, including for public safety, commercial and government services, and wireless emergency alerts solutions for network operators

• Call-Handling Solutions:

we provide comprehensive call handling applications for Public Safety Answering Points

• Customers include state and local governments across Canada and the U.S., and several of the largest telecommunications companies in the world (including AT&T and Verizon)

Financial information about our business segments, including net sales, operating results, 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 (12) Segment Information" included in "Part II - Item 8.

Financial Statements and Supplementary Data ."

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Satellite and Space Communications Segment

Our Satellite and Space Communications segment designs, builds and supports a variety of sophisticated communications equipment that is designed to meet or exceed the highest standards for performance and quality by businesses and governments worldwide.

Applications of our equipment include high-throughput cellular backhaul solutions, modern troposcatter communications equipment, satellite ground station systems, electronic components engineered for use in outer space and high-powered RF/microwave amplifiers and control components.

Our customers and end-users include the world’s largest corporations, governments and defense agencies, including the U.S.

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 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.

Our Satellite and Space Communications segment designs, builds and supports a variety of sophisticated communications equipment critical to modern communications infrastructures.

We are one of a limited number of U.S.-based providers of modems and high-power amplifiers, and a market leader in troposcatter technologies.

Our Satellite and Space Communications segment has an innovative portfolio of these mission-critical technologies and serves some of the world’s largest defense contractors and allied foreign governments, as well as multiple U.S.

government agencies, including the U.S.

Department of Defense.

The Satellite and Space Communications segment operates in large and growing end markets that benefit from multiple tailwinds and demand-drivers, including growing global geopolitical tensions, rising global defense spending, and high barriers to entry.

Further, these end markets are undergoing technology upgrade cycles and modernization initiatives that are expected to underpin demand for years to come.

Fueling these cycles are the USSF’s Commercial Space Strategy and the DoD’s Joint All Domain Command and Control approach, which are expected to generate strong demand for the Satellite and Space Communications business’ next-generation digital solutions.

Today, only a limited number of companies, including Comtech, can serve the complex needs of the U.S.

and other governments and meet this demand.

Our Satellite and Space Communications segment is organized into four categories:

satellite modem and amplifier technologies, troposcatter technologies, government services and space components.

Satellite Modem and Amplifier Technologies

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Many of our key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable our customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data throughput.

We hold leadership positions in the market for high-throughput modems used in cellular backhaul, a market that has been rapidly growing due to increased mobile phone usage and increasing data throughput demands from LTE and 5G deployments worldwide.

An estimated 3 billion people globally remain unconnected to any wireless services, representing a significant opportunity.

In fiscal 2021, we introduced a Time Division Multiple Access ("TDMA") technology solution which offers best-in-class support for very large satellite networks that use Very Small Aperture Terminals (“VSATs”).

This technology allows our customers to cost-effectively provide wireless services to end-users in complex geographies or areas where cellular infrastructure is otherwise unavailable.

In fiscal 2022, we introduced ELEVATE™, a revolutionary solution that combines our Heights Dynamic Network Access ("H-DNA") and TDMA technologies into a single VSAT platform that delivers increased value to our customers by enabling private or shared VSAT networks of any size and topology on a single unified platform.

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.

We hold strong positions in the market for high-throughput modems used in cellular backhaul, a market that has been rapidly growing due to increased mobile device usage and increasing data throughput demands from LTE and 5G deployments worldwide.

An increasing area of focus for many governments, including the U.S.

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.

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

In September 2024, we announced the launch of our new Digital Common Ground (“DCG”) portfolio of modems, designed to enable the U.S.

DoD and coalition partners to move to digitized, hybrid satellite network architectures.

Built on the our proven satellite communications (“SATCOM”) modem portfolio, our DCG modems are designed and built at Comtech’s headquarters in Chandler, AZ and support commercial and government satellite operations on a single common platform that can be reconfigured rapidly to address changing operational needs.

We believe our DCG portfolio is one of the first product lines on the market today offering robust access to multi-orbit capabilities across commercial and purpose-built networks.

The DCG product line is also one of the first to be Digital Intermediate Frequency Interoperability (“DIFI”) compliant, adhering to DoD and coalition communications standards to enable seamless information flow between services, a key tenet of Combined Joint All Domain Command and Control (“CJADC2”).

The DCG product line offers industry leading performance, through multi-gigabit throughput at launch.

In addition, we incorporate modern cybersecurity design principles at every level across our DCG product line, ranging from a trusted supply chain to a thoughtful software upgrade lifecycle, including in-field updates.

We believe the technologies incorporated into our DCG product line create a meaningful competitive advantage for us.

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

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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 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

With persistent threats from state and non-state actors, governments around the world are increasingly seeking ways to mitigate vulnerabilities using information and more reliable communication systems to increase decision-makers’ situational awareness.

Many of our mission-critical technologies are part of integrated communication infrastructure systems such as the U.S.

military's Command, Control, Communications, Computers, Cyber Intelligence, Surveillance and Reconnaissance (also known as "C5ISR") systems and similarly complex networks for international governments.

Troposcatter Technologies

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 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:

and foreign governments use our over-the-horizon microwave systems to, among other things, transmit radar tracking, run C5ISR applications and connect to remote border locations.

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™ 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.

The COMET™ is capable of being transported in a carrying case by a single individual and set up in under fifteen minutes, extending critical services into areas where there is no communications infrastructure, or the infrastructure has been destroyed.

Special Forces, as well as non-U.S.

NATO forces, have already begun procuring and deploying the COMET™ for high reliability, mission essential communications.

We provide field support sustainment services, centralized and deployed depot services, and technology insertion services to the U.S.

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).

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

We have designed, manufactured, and delivered troposcatter systems for well over fifty years.

We have significantly advanced the capabilities of our Troposcatter Family of Systems (“FoS”):

we now deliver a next-generation, software-defined solution that represents a thousand-fold performance increase over prior generations of equipment.

Over the recent past, our next-generation Troposcatter terminals have been chosen by the U.S.

Army, the Marines and defense organizations overseas to support the tactical communications requirements of our allies.

While our traditional buyer is military, advances in mobility and performance expand our end markets to include new customers.

Key industry verticals we are seeking to sell into include oil and gas, utility, marine and rail uses.

At the same time, the traditional defense market is changing and growing in ways that we believe make our equipment more relevant:

for years, conflicts involving the U.S.

and our allies mostly involved actions against unconventional adversaries with less advanced technology.

That is no longer the case, as conflicts involving state actors arise around the globe.

and allied defense strategies are shifting focus to threats from organized, better equipped and higher technology adversaries.

This places a premium on sophisticated communications technology from trusted, onshore providers, and creates a natural upgrade cycle for legacy systems deployed globally over the years.

We’re encouraged by the potential for our Troposcatter FoS, as we believe we offer one of the best products, with one of the best technologies, to a growing list of customers with expanding use cases, and a set of newly-developing end markets that should provide our business with long-term growth opportunities.

Government Services

We provide training and field support for multiple U.S.

government agencies across an array of programs.

These are typically long-term, multi-million dollar contracts, and examples include:

Comtech as sole award winner of a 5-year, $544.0 million Global Field Service Representative (“GFSR”) contract with the U.S.

Army to provide onsite professional engineering services, as well as supply and support communications technologies (we note that this contract is currently under protest by the incumbent);

Comtech as sole award winner of a 5-year, $125.0 million contract to provide complex cybersecurity operations training for U.S.

government customers;

and Comtech as one of multiple awardees of a large multi-year Global Tactical Advanced Communication Systems II (“GTACS II”) contract with the U.S.

Army to support Very Small Aperture Terminal (“VSAT”) satellite systems and related services.

Space Components and Antennas

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Our quality engineering team assures that the product received from our suppliers and test facilities are compliant to their respective specifications prior to shipment to our end customers.

Most recently, our service offerings have been expanded to include kitting to customer Bill of Materials with direct shipments to customer designated contract manufacturers.

Within the satellite communications market, we are a leading provider of X/Y terminal solutions that fully support the mission requirements of LEO, MEO and GEO satellite communication and tracking requirements, offering a host of high-performance single-band and multi-band feed solutions.

Our service offerings have been expanded to include kitting to customer bill of materials with direct shipments to customer designated contract manufacturers.

Within the satellite communications market, we are a leading provider of components that support the mission requirements of LEO, MEO and GEO satellite communication and tracking requirements, offering a host of high-performance single-band and multi-band feed solutions.

We also supply maritime antenna solutions that are fielded by foreign governments.

High Power Amplifiers and Switches

We offer several unique high-performance transmit and receive technologies used in sophisticated communication systems, including electronic warfare, radar, data link, medical and identification friend or foe ("IFF").

As our customers push the envelope for mobility, speed and frequency, we believe that demand for high-performance transmission products will increase over time.

Our solid-state, high-power RF microwave amplifiers and related switching control technologies are utilized in many critical applications, including electronic warfare, communications, radar, data link, IFF and medical applications (such as oncology treatment systems).

In the electronic warfare marketplace, we support a variety of legacy systems and are participating in the ongoing migration to platforms that require smaller and lighter amplifiers integrated with additional signal processing functionality, providing more complete transmit and receive functionality.

Our solutions are designed to increase the flexibility of systems by providing wider bandwidth capabilities to address increased data transmission needs in challenging environments.

We also believe the desire for increased airspace situational awareness will create increased opportunities for our radar and IFF products, which are used by government and commercial customers around the world.

Our high power and highly reliable Gallium Nitride ("GaN") amplifier technology is increasingly used both to update existing radar systems for improved sensitivity and range, as well as for new radar applications and installations.

In addition to technologies that enhance performance of primary radars, we also supply solutions for IFF systems that provide positive identification of radar targets for secondary surveillance systems.

Satellite and Space Communications:

Key Markets and Growth Drivers

Combined, our Satellite and Space Communications segment offers our customers one-stop-shopping for sophisticated satellite ground station technologies and solutions, including SCPC and TDMA modems, amplifiers, antennas, frequency converters and network software for customers who utilize satellite communications.

Our products are used to modulate, demodulate and amplify signals, carry voice, video and/or data over networks and are vital to satellite communication applications, including air-to-ground communications, video broadcasting and the backhaul of cellular traffic.

Our Satellite and Space Communications segment manufactures most of the satellite ground station equipment we sell to our customers.

We believe that the overall satellite ground station equipment industry will grow from current levels and will be increasingly combined with existing and new cellular networks.

This growth is expected to occur because of widespread deployment of, and upgrades to, 4G and 5G ground-based systems, including satellite earth stations, as well as the integration of high-performance amplifiers necessary to meet long-term demand for high-performance satellite communications applications, such as satellite-based wireless backhaul, DTH, HD and 4K broadcasting, and in-flight connectivity.

We believe that Comtech is well-positioned to capitalize on this demand through sales of our market-leading satellite ground station technologies, including new next-generation satellite earth station technologies that can be used with the thousands of new LEO, MEO and large HTS satellite constellations that are expected to be deployed over the next several years.

Examples of end-market applications that are driving long-term demand for our satellite-based communication technologies include:

As noted previously, the Satellite and Space Communications segment operates in large and growing end markets that benefit from multiple tailwinds, including technology upgrade cycles and modernization initiatives that are expected to underpin demand for years to come.

The need for more communications infrastructure from governments and enterprise alike is expected to increase as larger constellations of satellites are deployed, connected devices and end-points proliferate, and elevated geopolitical tensions persist and re-prioritize government agency and defense spending.

We believe that we are well-positioned to capitalize on this demand through sales of our market-leading, including new next-generation satellite ground infrastructure technologies that can be used with the thousands of new LEO, MEO and large HTS satellites that are expected to be deployed over the next several years, and our advanced troposcatter systems.

Examples of end-market applications that are driving long-term demand for our communication technologies include:

• Government and Military Satellite Communications:

Government users rely on high-speed connectivity in a variety of conditions throughout the world to provide real time information sharing, including Situational Awareness (“SA”), dissemination of Intelligence, Surveillance, and Reconnaissance (“ISR”) information, and communications.

Our communications solutions provide command and control and satellite networking capabilities that support U.S.

and allied government initiatives for assured and resilient communications capabilities, as well as supporting interoperability objectives, including the Joint All Domain Command and Control (“JADC2”) efforts.

• New LEO, MEO and HTS Satellites:

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 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.

Thousands of new satellites are reportedly in orbit or being launched over the next several years, according to announcements by companies including Telesat Lightspeed, Eutelsat, 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 TM , Heights TM and UHP networking platforms, and our solid-state amplifiers 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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In developing regions of the world, and in remote areas where terrestrial network infrastructure is lacking (or where challenging geography prohibits it), wireless network operators often backhaul, or transport, their wireless data traffic using satellite-based networking technologies.

Comtech is well positioned to serve the high-performance, high availability needs of satellite-based cellular backhaul through sales of our SCPC and TDMA satellite modems as well as our Heights TM , ELEVATE TM and UHP networking platforms.

• Government and Military Satellite Communications:

Our communications solutions provide command and control and satellite networking capabilities that support U.S.

• Enterprise Networks and Internet of Things (“IoT”):

Satellite services are increasingly used for Machine-to-Machine data connectivity for both critical infrastructure applications such as utility companies (electrical grid, oil rigs, gas pipelines, water companies) as well as IoT networks.

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.

We are well positioned to serve the high-performance, high availability needs of satellite-based cellular backhaul through sales of our SCPC and TDMA satellite modems as well as our Heights TM , ELEVATE TM and UHP networking platforms.

• Troposcatter Family of Systems:

and allied defense strategies are shifting focus to threats from organized, better equipped and higher technology adversaries, placing a premium on sophisticated communications technology from trusted, onshore providers.

Comtech’s Troposcatter Family of Systems (“FoS”) delivers a next-generation, software-defined solution that represents a thousand-fold performance increase over prior generations of equipment.

Further, constant innovation means Comtech’s latest generation of equipment can be packed into two small cases, offering significant mobility improvements.

Our next-generation troposcatter terminals have been chosen by the U.S.

Army, the U.S.

Marines and defense organizations overseas to support the tactical communications requirements of our allies.

Additionally, we see multiple opportunities for non-defense applications, including oil and gas, utility, marine and rail industry use.

Satellite and Space Communications:

Customer Base

Our customer base for the Satellite and Space Communications segment comprises numerous governments and companies worldwide with whom we have longstanding relationships, including leading system and network suppliers in the global satellite, mobile cellular, defense, broadcast and aerospace industries, as well as the U.S.

federal government (including the U.S.

Army, Air Force, Marine Corps and Navy), U.S.

state and local governments and allied foreign governments.

Approximately 55.4% of the segment’s sales are derived from U.S.

government and related agency contracts.

Representative customer categories include:

Marine Corps, U.S.

Navy, prime contractors to the U.S.

Armed Forces, NATO and foreign governments (i.e., ministries of defense)

• Domestic and international defense customers, as well as prime contractors and system suppliers such as General Dynamics Corporation, Lockheed Martin Corporation, L3Harris Technologies, Inc., Northrop Grumman Corporation, Raytheon Technologies Corporation, The Boeing Company and ViaSat Inc.

• Commercial end-customers also include Claro Argentina, Intelsat S.A., JAXA, NASA, SED Systems (a division of Calian Ltd.), SES S.A.

and Speedcast International Limited

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

• Aviation industry system integrators such as Collins Aerospace, an RTX Business

• Oil companies such as Shell Oil Company and PETRONAS

Terrestrial and Wireless Networks Segment

Our Terrestrial and Wireless Networks segment is a leading provider of the hardware, software, and solutions critical to any modern 911 public safety and mobile network operator (“MNO”) infrastructure, as well as for applications services requiring the specific location of a mobile user's geospatial position.

Our Terrestrial and Wireless Networks segment is a leading provider of next generation 911 (“NG-911”) infrastructure and solutions for state and local governments and carriers.

From the moment a 911 call is made, Comtech provides highly reliable solutions that contribute to emergency calls being processed instantly, with proper routing to first responders.

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

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.

According to Frost & Sullivan, a leading third-party research firm, we were the second leading NG-911 primary contract holder at year-end 2023, with an estimated market share of 22.1% and a population coverage of nearly 60 million.

We have primary statewide contracts in Arizona, Illinois, Iowa, Massachusetts, Ohio, Pennsylvania, South Carolina and Washington.

We hold direct contracts in counties in Texas and Missouri (St.

Louis County).

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 three product areas:

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

Next Generation 911 & Call Delivery

On October 17, 2024, we announced that we are executing a strategy to transform Comtech into a pure-play satellite and space communications company.

Ongoing and future actions supporting our transformation strategy include an exploration of strategic alternatives for our Terrestrial and Wireless Networks segment, which is well underway.

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

next generation 911 and call delivery, Solacom call handling solutions and trusted location and messaging solutions.

Next Generation 911 and Call Delivery

In addition to 911 call routing, we provide systems integration, geospatial location information, satellite and location infrastructure terminals, and linkage to NG-911 Emergency Services IP Networks ("ESInet").

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We believe state and local governments need to upgrade existing legacy networks, location technologies, and call handling systems to modern NG-911 systems infrastructure, including 911 text messaging services, advanced data, real-time photos, and other types of information sharing over IP networks.

and Canada broadly adopt upgraded NG-911 and call handling solutions, we believe that other countries will follow similar technology and telecommunications advancements.

As the U.S., Canada and Australia broadly adopt upgraded NG-911 and call handling solutions, we believe that other countries will follow similar technology and telecommunications advancements.

Comtech’s public safety and location technology solutions have been deployed since 2006 and are utilized by domestic MNOs, as well as internationally, to provide reliable device location determination for public safety and commercial applications.

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Solacom Call Handling Solutions

We offer what we believe is a best-in-class call handling solution marketed under the Solacom Guardian brand name, which provides an integrated text-to-and-from 911 solution on a unified platform.

Solacom Guardian is our state-of-the-art call handling solution, which provides an integrated call and text-to-and-from 911 solution on a unified platform.

The solution provides a flexible user interface, adapts to varying customer environments and preferences, provides powerful call conferencing capabilities, enhanced reporting capabilities and offers geospatial 911 location call display directly from a customized map.

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The Guardian platform also offers a cloud-based reporting and analytics solution (“Guardian Insights”), designed to assist emergency call center directors to know their operations, so they can better plan and manage resources and workloads.

We are investing in product enhancements for our Guardian platform including additional cloud-based capabilities, analytics, and cyber security solutions.

We are investing in product enhancements for our Guardian platform, which include additional cloud-based capabilities, analytics, and cyber security solutions.

We have significantly increased our “911-as-a-Service" (“911aaS”) offering, deploying hosted 911 call centers solutions across numerous states and regions in the U.S.

and provinces in Canada.

and provinces in Canada, starting with locations where we have existing NG-911 networks.

Trusted Location and Messaging Solutions

We believe that as the industry moves toward digital transformation, customers will be looking for situational awareness solutions that are built on top of mapping and geo-services.

Our location technology solutions enable the determination of a mobile phone's geospatial position in a variety of environments, leveraging a wide range of signals including Global Positioning System ("GPS"), Global Navigation Satellite Systems ("GNSS") and multiple cellular positioning technologies ranging from 2G through 5G mobile networks.

Our location technology solutions enable the determination of a mobile device’s geospatial position in a variety of environments, leveraging a wide range of signals including Global Positioning System ("GPS"), Global Navigation Satellite Systems ("GNSS") and multiple cellular positioning technologies ranging from 2G through 5G mobile networks.

For our installed base of systems, we provide ongoing operational support, including administration of system components, system optimization, configuration management and maintenance services, including tracking customer support issues, troubleshooting and developing and installing maintenance releases.

Our Location Studio TM platform enables customers, particularly public safety agencies, to build their own applications with end-user functionality, such as maps, search, geocoding, routing, and navigation, using their own brand.

Our Location Studio ® platform enables customers, particularly public safety agencies, to build their own applications with end-user functionality, such as maps, search, geocoding, routing, and navigation, using their own brand.

We believe that customers and prospects are increasingly looking for alternatives to mapping services that are subject to change by the provider, and which meet market privacy and security requirements.

The Location Studio TM platform is a complete end-to-end location application consisting of maps, map data, including our Trusted OpenStreetMap ("TOSM") geo-services, application program interfaces ("APIs") and software development kits ("SDKs") enabling public safety ecosystems and enterprises to customize unique mapping applications.

The Location Studio ® platform is a complete end-to-end location application consisting of maps, map data, including our Trusted OpenStreetMap ("TOSM") geo-services, application program interfaces ("APIs") and software development kits ("SDKs") enabling public safety ecosystems and enterprises to customize unique mapping applications.

Map data includes positioning, search, enhanced local content, custom maps, navigation, geo-fencing, tracking integrated with third party data sources like camera feeds and IoT sensor data via cross-platform APIs and SDKs supporting all leading operating systems.

In fiscal 2022, we began marketing SmartResponse TM , a newly developed cloud-based solution that offers a common operational picture to PSAPs and first responders, enabling an effective data-driven response for security agencies and first responders by providing a holistic information environment for them.

We recently began marketing SmartResponse ® , a newly developed cloud-based solution that offers a common operational picture to PSAPs and first responders, enabling an effective data-driven response for security agencies and first responders by providing a holistic information environment for them.

This new solution offers streaming live feeds from traffic cameras at and near incident location, and accesses caller information like past residences, criminal history, or next-of-kin information at the tap of a button.

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.

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

Terrestrial and Wireless Networks:

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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.

We believe we are 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 our proven 911 infrastructure, we believe that 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.

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Using this technology, for example, MNOs can quickly broadcast emergency communications, such as severe weather alerts, to all devices in a specific geographical area.

Opportunities in Convergence

We believe that significant advances in technology have been driving a convergence across multiple aspects of the Terrestrial and Wireless Networks market and the Satellite and Space Communications market.

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 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.

The need for connectivity (more precisely:

constant, reliable connectivity) is growing on a worldwide basis.

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, 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

We have established long-standing relationships with thousands of customers worldwide, including leading system and network suppliers in the global satellite, mobile cellular, defense, broadcast and aerospace industries, as well as the U.S.

federal government (including the U.S.

Army, Air Force, Marine Corps, and Navy), U.S.

state and local governments, and foreign governments.

Our global Satellite and Space Communications and Terrestrial and Wireless Networks customers are increasingly seeking integrated solutions to meet their operational needs.

We believe that our customers recognize our ability to develop improved technologies and to meet stringent program requirements.

We hold prime positions on several key contracts and have had a long history of servicing key programs.

A table illustrating representative customers is provided below.

Satellite and Space Communications Segment

Representative Customers Terrestrial and Wireless Networks Segment

Representative Customers

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

Army, the U.S.

Marine Corps, the U.S.

Navy, prime contractors to the U.S.

Armed Forces, NATO and foreign governments (i.e., ministries of defense)

Domestic and international defense customers, as well as prime contractors and system suppliers such as General Dynamics Corporation, Lockheed Martin Corporation, L3Harris Technologies, Inc., Northrop Grumman Corporation, Raytheon Technologies Corporation, Telephonics Corporation, The Boeing Company and ViaSat Inc.

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 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, Ohio, New Hampshire, South Carolina, Vermont and Washington

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

(formerly CenturyLink, Inc.), Comcast Corporation, Nokia Corporation, T-Mobile USA, Inc.

Terrestrial and Wireless Networks:

Customer Base

Our customer base for the Terrestrial and Wireless Networks segment serves numerous customers, primarily in North America and Australia, with whom we have cultivated longstanding relationships, including state and local governments, and a number of the largest telecommunication companies in the world.

Representative customer categories include:

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

Louis County, MO and the North Central Texas Emergency Communications District

• End-customers also include AT&T Inc., Comcast Corporation, Nokia Corporation, T-Mobile USA, Inc.

and Verizon Communications Inc.

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In fiscal 2024, we achieved consolidated net sales of $540.4 million and Adjusted EBITDA of $45.7 million.

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.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Business Outlook for Fiscal 2024 .” For a definition and explanation of Adjusted EBITDA, see Part II – “Item 7.

Our fiscal 2024 performance and outlook for fiscal 2025 are discussed further in Part II – “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Fiscal 2024 Highlights and Business Outlook for Fiscal 2025 .” For a definition and explanation of Adjusted EBITDA, see Part II – “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Comparison of Fiscal 2024 and 2023 – Adjusted EBITDA .”

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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.

In order to position ourselves to take advantage of additional growth opportunities and meet our strategic objectives, we have followed, and will continue to follow, a disciplined approach in identifying, executing and capitalizing on acquisitions of businesses and enabling technologies.

Material acquisitions in the past several years include:

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

("UHP"), a leading provider of innovative and disruptive satellite ground station technology solutions.

With end-markets for high-speed satellite-based networks anticipated to significantly grow, our acquisition allows us to enhance our offerings with TDMA satellite modems.

The aggregate purchase price for accounting purposes for the acquisition of UHP was $37.5 million and UHP was fully integrated into our Satellite and Space Communications segment.

None of the information on our website, blog or any other website identified herein is incorporated by reference in this Form 10-K and such information should not be considered a part of this Form 10-K.

Strategic Transformation

Material acquisitions and divestitures in the recent past include:

On November 7, 2023, we completed the divestiture of our solid-state RF microwave high power amplifiers and control components product line, which was included in our Satellite and Space Communications segment, pursuant to a stock sale agreement entered into on October 11, 2023 (the "PST Divestiture").

Net proceeds from the PST Divestiture in fiscal 2024 were $33.2 million and used in part to repay a portion of our outstanding debt at the time, as well as to fund working capital needs.

On October 17, 2024, we announced that we are executing a strategy to transform Comtech into a pure-play satellite and space communications company.

Ongoing and future actions supporting our transformation strategy include:

an exploration of strategic alternatives for our Terrestrial and Wireless Networks segment, which is well underway;

the pursuit of further portfolio-shaping opportunities to enhance profitability, efficiency and focus;

and the implementation of additional operational initiatives to both achieve profitable results from operations as well as to align our go-forward cost structure with a pure-play focus on satellite and space communications.

In connection with this transformation strategy, we have also undertaken a detailed evaluation of our Satellite and Space Communications segment's product portfolio to identify opportunities to divest, separate and/or rationalize businesses or facilities that are not core to our go-forward focus.

Consistent with this effort, in our fourth quarter of fiscal 2024, we made the decision to exit our operations in Basingstoke, United Kingdom.

Such operations were established in connection with the prior management team’s fiscal 2020 acquisition of CGC Technology Limited, which primarily served customers in Europe.

Following the acquisition, Comtech continued to invest in the Basingstoke facility to advance LEO constellation-based antenna technologies in anticipation of significant production orders.

Taking into consideration the significant ongoing investment as well as unfavorable contract terms on prospective antenna sales, we concluded such operations would not generate an attractive return on invested capital and made the decision to exit these operations.

Furthermore, over the past several months, we have conducted an intensive review of our product portfolio to focus future investment on our most strategic, high-margin revenue opportunities within the Satellite and Space Communications segment.

There can be no assurance that the exploration of strategic alternatives will result in a transaction or other strategic changes or outcomes.

While anticipated to improve our profitability in future periods, such actions may result in near-term restructuring charges.

Sales, Marketing and Customer Support

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We devote resources to evaluating and responding to requests for proposals by governmental agencies around the world and, as needed, we employ the use of specialized consultants to develop our proposals and bids.

We intend to continue to expand international marketing efforts by engaging additional independent sales representatives, distributors and value-added resellers and by establishing foreign sales offices.

We intend to continue to expand international marketing efforts, as needed, by engaging additional independent sales representatives, distributors and value-added resellers and by establishing foreign sales offices.

In addition, we expect to leverage our relationships with larger companies (such as prime contractors to the U.S.

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Once a product is designed into a system, customers may be reluctant to change the incumbent supplier due to the extensive qualification process and potential redesign required in using alternative sources.

In addition, in recent years, we have found that overall sales cycles for each of our product lines have significantly increased.

In addition, in recent years, we have found that overall sales cycles for each of our product lines have significantly increased, as we continue to support our customer's overall migration and upgrade to newer designs and technologies.

Sales by geography and customer type, as a percentage of related net sales, are as follows:

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state and local governments.

Included in domestic sales are sales to Verizon Communications Inc.

("Verizon"), which represented 10.6%, 11.1% and 10.7% of consolidated net sales for fiscal 2023, 2022 and 2021, respectively.

Except for the U.S.

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

For fiscal 2024, except for the U.S.

government, there were no customers that represented more than 10% of consolidated net sales.

For fiscal 2023 and 2022, included in domestic sales are sales to Verizon Communications Inc.

("Verizon"), which were 10.6% and 11.1% of consolidated net sales, respectively.

International sales for fiscal 2024, 2023 and 2022 (which include sales to U.S.

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Our backlog as of July 31, 2024 was $798.9 million (of which $278.9 million was attributed to the Satellite and Space Communications segment and $520.0 million was attributed to the Terrestrial and Wireless Networks segment).

Such amount represented a new record level of consolidated backlog for our Company.

We estimate that a substantial portion of the backlog as of July 31, 2024 will be recognized as sales during the next twenty-four month period, with the rest thereafter.

Such estimate could be impacted by our transformation strategy discussed above, under the section " Strategic Transformation.

At July 31, 2024, 66.6% of our backlog consisted of orders for use by U.S.

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government customers also includes amounts appropriated by Congress and allotted to the contract by the procuring government agency.

Our backlog does not include the value of options that may be exercised in the future on multi-year contracts, nor does it include the value of additional purchase orders that we may receive under indefinite delivery/indefinite quantity ("IDIQ") contracts or basic ordering agreements.

Such backlog does not include the value of options that may be exercised in the future on multi-year contracts, nor does it include the value of additional purchase orders that we may receive under indefinite delivery/indefinite quantity ("IDIQ") contracts or basic ordering agreements.

In some cases, such as contracts received from large U.S.

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government) are subject to modification, cancellation at the convenience of the customer, or for default in the event that we are unable to perform under the contract.

Please see Item 1A – “ Risk Factors ” under Part I of this Form 10-K for more information about risks pertaining to recognition of our backlog.

Please see " Strategic Transformation " section discussed above, as well as Item 1A – “ Risk Factors ” under Part I of this Form 10-K for more information about risks pertaining to recognition of our backlog.

A significant portion of the backlog from our U.S.

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As a result of these contingencies, we may adjust our backlog if we determine that such orders are no longer firm and/or funded.

In addition to adjustments from these types of contingencies, variations in backlog from time to time are attributable, in part, to changes in sales mix, the timing of contract proposals, the timing of contract awards, delivery schedules on specific contracts and new bookings obtained through acquisitions.

A large majority of the solutions in our satellite ground station technologies product line within our Satellite and Space Communications segment operate under short lead times.

Backlog in both our Satellite and Space Communications segment and Terrestrial and Wireless Networks segment and has been, and could be, highly influenced by the nature and timing of orders received from federal, state and local governments and defense-related agencies, causing such orders to be subject to unpredictable funding, deployment and technology decisions by such customers.

A large majority of the solutions in our satellite ground infrastructure technologies product line within our Satellite and Space Communications segment operate under short lead times.

Backlog in both our Satellite and Space Communications segment and Terrestrial and Wireless Networks segment has been, and could be, highly influenced by the nature and timing of orders received from federal, state and local governments and defense-related agencies, causing such orders to be subject to unpredictable funding, deployment and technology decisions by such customers.

As a result, we believe our backlog and orders, at any point in time, are not necessarily indicative of the total sales anticipated for any future period.

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During fiscal 2024, 2023 and 2022, we were reimbursed by customers for such activities in the amounts of $18.9 million, $14.0 million and $9.8 million, respectively.

In addition to the recent increases in customer-funded research and development activities, in fiscal 2024, we also experienced an increase in engineering efforts related to cost to fulfill contract assets and internal use software, for which we capitalized $2.9 million and $3.8 million, respectively.

As a result of these trends and the impact of prior reductions in force announced in fiscal 2023, our research and development expenses for financial reporting purposes significantly decreased in fiscal 2024 as compared to historical periods.

During fiscal 2024, 2023 and 2022, we incurred $4.1 million, $3.8 million and $1.2 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.

A significant portion of the fiscal 2024 costs related to our steerable antenna operations in Basingstoke, United Kingdom, which we decided to exit in the fourth quarter of fiscal 2024, as discussed above in the section " Strategic Transformation.

" We are evaluating this new market in relation to our long-term business strategies, and expect to incur additional costs in fiscal 2025.

However, such costs will be reported in the future as part of our ongoing research and development activities and not added back to our Adjusted EBITDA.

Intellectual Property

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Our future success depends on, among other things, our ability to keep pace with such changes and developments and to respond to the increasing variety of electronic equipment users and transmission technologies.

Some large defense-based companies, such as Northrop Grumman Corporation, have subsidiaries or divisions that compete against us in one or more business segments.

Some large defense-based companies have subsidiaries or divisions that compete against us in one or more business segments.

In addition, new and potential competitors are always emerging.

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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.

(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.

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

(acquired by Frontgrade Technologies, a portfolio company of Veritas Capital), Agilis Satcom, AMERGINT Technologies, Inc., Amkom Design Group Inc., AnaCom, Inc., Codan Limited, Communications and Power Industries (also referred to as "CPI"), Datum Systems, Inc., dB Control Corp.

(a subsidiary of HEICO Corp.), ETM Electromatic Inc.

(acquired by Teledyne Technologies 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, 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.

(including Newtec), Starlink Services, LLC (a wholly owned subsidiary of SpaceX), Terrasat Communications Inc., Trace Systems Inc., TrellisWare Technologies, Inc., Ultra Intelligence and Communications, and ViaSat, Inc.

Terrestrial and Wireless Networks – AT&T Inc., Atos, Bandwidth.com, Carbyne, Central Square Technologies, 8x8, Inc., Everbridge, Inc., Hexagon AB, Immersive Labs, INdigital (acquired by Novacap), Intersec, Intrado Corporation (formerly West Corporation), LM Ericsson, Lumen Technologies, Inc.

(formerly CenturyLink, Inc.), Mobilaris AB, Mobile Arts AB, Motorola Solutions, Inc., NGA911, NextNav, Inc., Nokia Networks (a subsidiary of Nokia Corporation), Polaris Wireless, RapidDeploy, Inc., RapidSOS, Rave Mobile Safety, Sinch AB (Inteliquent), Synergem Technologies, SS8, 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

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.

Our employees are one of our most valuable assets and we believe our success depends on the talent we attract and retain.

Our comprehensive people strategy continues to focus on developing a meaningful plan to enhance our employees’ engagement and interests, which will complement and build on our strong foundation.

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;

Our People Strategy is also focused on meeting and executing our strategic recruitment initiatives, developing and promoting talent;

supporting competitive benefits and wellness programs;

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

Diversity, Equity, Inclusion and Belonging

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

Fostering Proactive Belonging

We believe the principle of hospitality acts as a catalyst for fostering a sense of proactive belonging, a key component for achieving a sustainable impact.

At the heart of our approach is the intentional act of bringing people together across social, cultural, and experiential gaps.

By creating opportunities for provocative thinking and meaningful experiences, we are able to challenge assumptions that disrupt our innate habits of thinking and behaving.

We expect our employees and contractors to foster authentic connections, cultivate hospitable spaces, embrace disorienting dilemmas, and emphasize continuous learning.

Our policy promotes equal employment opportunities without discrimination or harassment on the basis of race, color, national origin, religion, sex, age, disability, or any other status protected by law.

Our Chief People Officer is committed to driving these policies and efforts across the enterprise to cultivate a strong culture of inclusivity.

We value a workforce that is diverse by thought.

To promote this initiative, we reach out to a variety of institutions, attend recruiting events aimed at attracting talent of various backgrounds and cultures;

and emphasize creating opportunities of belonging during our talent, promotion, and succession planning.

At least once per month we organize an event or engagement where employees are encouraged to participate to celebrate our workforce and our communities.

Events include Asian American Pacific Islander Heritage Month, International Women’s Day, Breast Cancer Awareness Month, and Pride Month, among others.

In fiscal 2024, we emphasized our commitment to celebrations like Pride Month by featuring a lunch and learn webinar led by one of our Executive Team Leaders who discussed their journey as a member of the LGBTIQA+ community.

Each year we also commemorate "Honor Week” by spotlighting our veteran employees and recognizing their accomplishments.

In fiscal 2024, we also launched our first Employee Resource Group focusing on Women’s Leadership to deepen and expand our efforts in this space.

Employee Workforce

Employee workforce consists of the following at July 31, 2024 and 2023:

Women 24 % 22 %

People of Color* 39 % 38 %

Veterans 12 % 10 %

People with Disabilities 7 % 5 %

* People of Color include employees who identify with any race other than white.

To meet and execute our strategic business goals, we are focused on sourcing, attracting, and retaining top talent, especially those with engineering, science, and technical backgrounds.

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 opportunities by offering courses on our online learning management system.

Developing and Retaining Talent

Our employees are one of our most valuable assets and we believe our success depends on the talent we attract and retain.

Our comprehensive people strategy continues to focus on developing a meaningful plan to enhance our employees’ engagement and interests, which will complement and build on our strong foundation.

To meet and execute our strategic business goals, we are focused on sourcing, attracting, and retaining top talent, including those with engineering, science, and technical backgrounds.

To boost our talent attraction efforts, we partner with local university student organizations, such as Arizona State University, to educate students about our work and to hire interns throughout our organization.

This year, our total internship class was comprised of 24 students, up from 12 students in fiscal 2023.

We designed our internship program to be a hands-on program that exposes students to a wide variety of activities and allows them to learn from real-world projects.

All interns are paired with a mentor and are invited to attend weekly lunch and learns to receive insights about our culture and working environment.

We value employee development at all career stages and performance levels.

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

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

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 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.

In fiscal 2024 we launched Comtech University through a learning management system that is available year-round for development courses facilitated by a training coordinator.

We are developing additional courses focusing on financial, leadership, and lean management skills.

We also developed a “Program Management Office” academy for program management employees which includes courses and training to become a certified project manager and introduce company-wide best practices and procedures.

We are working to build stronger employee engagement through several new initiatives.

We believe that strong communication is key to providing the foundation for an engaged workforce.

Company news, employee opportunities, company initiatives, and events are communicated through our internal and external blogs and our redesigned company-wide intranet.

Since launching our new MyComtech intranet site, we have identified new ways to recognize our employees.

We commenced our Meet the Team series profiling one employee each month in a monthly article released on our intranet.

Through the series, employees are able to learn about a fellow team member including their current position, career path, background, and interests outside of work.

Mentorship and collegiality are strongly valued at Comtech.

We value exceptional employees who make a difference to the communities where we operate.

In addition to spotlighting employee achievements through our communication channels, we have introduced other initiatives such as awards to motivate and recognize employees who go the extra mile.

At July 31, 2024, we had 1,676 employees (including temporary employees and contractors), 1,048 of whom were engaged in production and production support, 337 in research and development and other engineering support and 291 in marketing and administrative functions.

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We believe that our employee relations are good.

Subsequent to our fiscal year end, headcount based in the United Kingdom was significantly reduced as a result of our fourth quarter of fiscal 2024 decision to cease operations at such location.

Safety and Wellness

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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.

This year employees had an opportunity to participate in wellness events as a company-wide challenge.

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

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

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.

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.

This year we added several new benefits including a legal plan and discounted pet insurance.

We are committed to reducing our environmental impact across our value chain, including in the design of our products, operation of our facilities, and procurement of materials.

We are also committed to maintaining compliance with the various global environmental regulations that are applicable to our business segments, including with the respect to the waste and emissions generated at our facilities.

Our Board of Directors is responsible for the oversight of our environmental efforts, and the management of climate-related issues is overseen by our Chief Legal Officer.

In September 2023, we completed our first climate change disclosure through CDP, which includes a baseline greenhouse gas inventory for company-wide Scope 1 and 2 emissions.

In fiscal 2024, we completed our second Greenhouse Gas ("GHG") inventory.

Having established a foundation, we are working to build on our environmental strategy and initiatives.

We seek to increase efficient usage of building space, respond to increased work-from-home and reduced requirements for office space, and encourage reduced employee commuting.

We offer our employees incentives to promote greener commuting options through rideshare programs.

We are committed to providing a workplace which values the health, safety, and well-being of our employees, contractors, and visitors to our facilities, complying with Environment, Health and Safety ("EHS") legal requirements, and minimizing EHS risk.

In fiscal 2024, we developed a comprehensive EHS Management System ("EHSMS"), designed to align with the core elements of international standards for environmental and occupational health and safety management systems, while placing a risk-based focus on the elements most relevant to our operations.

The EHSMS has the goals of engaging employees at all levels of the organization in the prevention of work-related injuries and illnesses, reducing environmental impacts, and fostering a culture of continuous improvement.

Government Contracts and Security Clearances

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Individual agencies can also have acquisition regulations.

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

For example, the DoD implements the FAR through the U.S.

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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These reviews cover issues such as cost, performance and accounting practices relating to our contracts.

The government may challenge a supplier's costs and fees.

The government may challenge a supplier's costs and fees or require corrective actions which can delay programs and increase our costs.

Suppliers are also required to comply with the National Industrial Security Program Operating Manual which relates to the handling of classified materials and programs and is administered by the Defense Counterintelligence and Security Agency (“DCSA”).

Suppliers who do not comply with these various regulations may lose and/or become ineligible for facility security clearances and/or participation in classified programs.

Suppliers who do not comply with these various regulations may lose and/or become ineligible for facility security clearances and/or participation in classified and non-classified programs.

Under firm fixed-price contracts, we perform for an agreed-upon price and we can derive benefits from cost savings, but bear the risk of cost overruns.

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government (including sales to prime contractors to the U.S.

Of this amount, firm fixed-price and cost-reimbursable type contracts (including fixed-fee, incentive-fee and time and material type contracts) accounted for approximately $126.0 million and $46.0 million, respectively.

Of this amount, firm fixed-price and cost-reimbursable type contracts (including fixed-fee, incentive-fee and time and material type contracts) accounted for $135.5 million and $46.8 million, respectively.

Regulatory Matters

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and foreign regulations such as the Arms Export Control Act, the International Emergency Economic Powers Act ("IEEPA"), the International Traffic in Arms Regulations ("ITAR"), the Export Administration Regulations ("EAR") and the trade sanctions laws and regulations administered by the U.S.

Department of the Treasury’s Office of Foreign Assets Control ("OFAC"), the Department of Commerce ("DoC") as well as other applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.

Department of the Treasury’s Office of Foreign Assets Control ("OFAC"), the Department of Commerce ("DoC") and their foreign counterparts as well as other applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.

We must comply with all applicable export control laws and regulations of the U.S.

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Certain of our products and systems may require licenses from U.S.

government agencies for export from the U.S., and some of our products are not permitted to be exported.

government agencies for export from the U.S.

or other countries, and some of our products are not permitted to be exported.

We cannot be certain that we will be able to obtain necessary export licenses, and such failure would materially adversely affect our operations.

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In addition, in certain cases, U.S.

export controls also severely limit unlicensed technical discussions, such as discussions with any persons who are not U.S.

and foreign export controls also severely limit unlicensed technical discussions, such as discussions with any persons who are not U.S.

citizens or permanent residents.

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A violation of any of the regulations enumerated above could materially adversely affect our business, financial condition and results of operations.

Additionally, changes in regulatory requirements could further restrict our ability to deliver services to our international customers, including the addition of a country to the list of sanctioned countries under the IEEPA or similar legislation could negatively impact our business.

Additionally, changes in regulatory requirements could further restrict our ability to deliver services to our international customers or negatively impact our business, including the addition of a country to the list of sanctioned countries under the IEEPA or similar legislation.

In the past, we have self-reported violations of export control laws or regulations to the U.S.

Department of State, Directorate of Defense Trade Controls ("DDTC"), DoC and OFAC.

Department of State, Directorate of Defense Trade Controls ("DDTC"), DoC, OFAC and their foreign counterparts.

In addition, we have made various commitments to U.S.

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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