Outerbridge Files Definitive Proxy Statement and Sends Letter to Comtech Shareholders

Outerbridge Capital Management, LLC (“Outerbridge”), a beneficial owner of approximately 4.9% of Comtech Telecommunications Corp.’s (NASDAQ: CMTL) (“Comtech” or the “Company”) outstanding shares of common stock, today announced that it has filed its Definitive Proxy Statement and has sent a letter to shareholders in connection with its nomination of two highly qualified director candidates – Wendi Carpenter and Sidney “Sid” Fuchs – for election to the Comtech Board of Directors (the “Board”) at the upcoming 2021 Annual Meeting of Stockholders (the “Annual Meeting”) scheduled for December 17, 2021.

The Definitive Proxy Statement is available at https://www.restorecomtech.com/proxy-statement.

The full text of Outerbridge’s letter to shareholders is available at https://www.restorecomtech.com/stockholder-materials.

The letter details the following:

• Comtech’s persistent underperformance, strategic failures, and lost credibility – Outerbridge believes that a savvy and shareholder-aligned Board and management team could capitalize on Comtech’s significant opportunities, particularly with industry-leading next-generation 911 technology and growing core end markets in government and satellite communications. In Outerbridge’s view, if Comtech’s 911 business were valued at peer multiples, it could be worth at least $700 million on its own – exceeding in value Comtech’s current market cap. Unfortunately, the Company has delivered woeful performance for shareholders over the long-term, with returns lagging both the peer median and relevant indices on a 1-, 3-, 5-, and 10-year basis, while shares have also declined after eight consecutive quarters of earnings announcements (see here for more details).

• The Company’s long history of failed M&A and value destruction – Comtech’s list of failed M&A and capital misallocation includes its acquisition of TeleCommunication Systems, Inc. for $430 million, after which it was forced to issue dilutive equity at a 40% discount to pre-merger share price levels; its failed acquisition of Gilat Satellite Networks Ltd. (“Gilat”), which resulted in a sharp decline to Comtech’s stock and the payment of a $70 million termination fee to Gilat; and its recently announced value-destructive and entrenchment-motivated decision to issue up to $125 million of votable, convertible preferred equity to White Hat Capital Partners LP and Magnetar Capital LLC, substantially diluting existing shareholders. This troubling pattern must change and is even more important to address in light of the unsolicited takeover bid received from Acacia Research. As we noted in our November 2nd press release, the Board urgently needs Outerbridge’s independent, operationally skilled, and transactionally experienced nominees to help lead a Strategic Alternatives Committee and run a thorough and value-maximizing review process.

• Comtech’s long history of poor corporate governance and lack of true independence on the Board – Outerbridge believes that the Board has been deliberately deprived of industry experience and independence throughout CEO and Chairman Fred Kornberg’s nearly 50-year tenure. Recent Board additions, such as Lisa Lesavoy in 2020 and Judy Chambers in 2021, neither of whom had any prior public board experience or relevant background in Comtech’s end markets, failed to add technical knowledge, strategic capabilities, or true independence to the Board – particularly since these additions continued a long-standing pattern of current Board members hand-picking new directors.

• The Company’s disappointing pattern of engagement and entrenchment maneuvers – Since Outerbridge’s public letter on June 14, 2021, the Board has deployed a series of delays, mischaracterizations, obstructive tactics, false statements, and, most recently, a “vote buying” scheme to restrict any meaningful dialogue around Board composition and preserve the status quo. Further, in order to hide from its poor governance and performance track record, Comtech has relentlessly and tediously belittled Outerbridge, a large and engaged shareholder, who unlike the management team and Board, has invested a significant amount of capital in the Company and whose interests are aligned with ALL shareholders. In reality, this contest is about adding two individuals to the Board who are completely independent of Outerbridge and possess the desperately needed experience and expertise that will help deliver value for shareholders.

• Why Outerbridge’s nominees are the better choice for shareholders – Wendi Carpenter and Sid Fuchs would bring deep sector knowledge, operational capabilities, and extensive experience with M&A transactions to the boardroom. In comparison, Comtech nominee Judy Chambers has NO relevant industry expertise or any prior public board experience. Furthermore, as Chair of the Nominating and Governance Committee, she bears direct responsibility for appointing Michael Porcelain and Mark Quinlan to the Board AFTER the 2021 Annual Meeting instead of letting shareholders decide which directors are best suited to represent them in the boardroom. Meanwhile, Comtech nominee Larry Waldman must be held responsible for the Company’s poor capital allocation strategy and failure to create shareholder value during his six-year tenure. Shareholders should question the rationale of stacking a majority of the Board with “financial experts” and not directors experienced in the government, satellite, or public safety markets that Comtech serves. What is clear is that Outerbridge’s nominees – Wendi Carpenter and Sid Fuchs – would bring much needed independence from management and the industry expertise and experience required to properly oversee the Company’s strategic direction and performance. Importantly, Wendi and Sid are committed to acting in the best interests of all shareholders at all times.

Vote on the WHITE proxy card to elect Outerbridge’s highly qualified and fully independent nominees to the Comtech Board.

About Outerbridge Capital Management, LLC

Outerbridge Capital Management, LLC is a New York-based investment adviser that typically invests across the technology and technology-impacted sectors. As part of its investment process, Outerbridge regularly conducts significant due diligence on its portfolio companies and engages constructively with both management teams and boards where appropriate.

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