Comtech Telecommunications Corp. (NASDAQ: CMTL) shares incurred a 7.50% decline, concluding the preceding trading session at a value of $8.14. This downturn in Comtech (CMTL) occurred before the release of its financial performance data post-market closure yesterday. Notably, the day witnessed a trading volume of over 0.44 million shares for CMTL stock.
For the final quarter of fiscal 2023, Comtech reported consolidated net sales of $148.8 million, marking a notable 9.2% sequential increase and a remarkable 17.2% increase compared to the same quarter in fiscal 2022. This was attributed to improved net sales in both of Comtech’s operational segments.
Operating income reported by CMTL for the quarter was $1.1 million, which was a substantial turnaround from the $2.1 million operating loss in Q4 of fiscal 2022. This represented Comtech’s first GAAP-compliant operating income since Q4 of fiscal 2021. Adjusted EBITDA reached $18.9 million, constituting 12.7% of consolidated net sales, reflecting the positive impact of the One Comtech lean initiatives.
This growth was, however, partially offset by a decrease in the gross profit percentage. Importantly, the comparison of Adjusted EBITDA for Q4 of fiscal 2023 showed growth, both in monetary value and as a percentage of sales, while Comtech continued to invest in its One Comtech transformation.
In a separate press release, Comtech has unveiled its commitment to a definitive agreement with Stellant Systems. Under this agreement, Stellant will procure Comtech’s Power Systems Technology (PST) product line for a total cash consideration of $40 million. This sum encompasses an initial purchase price of $35 million, along with potential additional consideration of up to $5 million contingent upon the attainment of specific performance benchmarks.
PST’s preeminent capabilities in terms of frequency and power, which are underpinned by Gallium Nitride solid-state power amplification, will synergize with Stellant’s commanding frequency and power prowess in traveling-wave tube power amplification, establishing the market’s foremost technology leader.
The board of directors from both corporations has unanimously sanctioned this transaction. The acquisition of the PST product line will bolster Stellant’s array of RF amplification offerings. Comtech anticipates the consummation of this transaction by the conclusion of October 2023, contingent upon the requisite regulatory endorsements and customary closing prerequisites.
