Q3 2025 Comtech Telecommunications Corp Earnings Call
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Welcome to Comtech telecommunication corp's.
Conference call for third quarter of fiscal 2025.
As a reminder, this conference call is being recorded.
Speaker Change: Now like to turn the call over to Maria Ciriello Senior director of financial operations have Comtech. Please go ahead Maria.
Speaker Change: Thank you operator, and thanks to everyone for joining us today.
Ken Trial: I'm here with Ken trial context, Chairman, President and CEO, Mike Bondi CFO.
Ken Trial: Daniel Kaczynski, President of the satellite and space Communications business, and Jeff Robertson President of the terrestrial wireless networks.
Ken Trial: Before we get started please note we have a detailed discussion of the quarter in the press release and thank you. We issued this afternoon, which is available on our website as well as the Sec's website.
Ken Trial: Certain information presented in this call will include but not be limited to information relating to the future performance and financial condition of the company the company's plans objectives and business outlook and the plans objectives and business outlook of the company's management.
Ken Trial: The company's assumptions regarding such performance business outlook and plans are forward looking in nature and always involve significant risks and uncertainties.
Ken Trial: Actual results could differ materially from such forward looking information.
Ken Trial: Any forward looking statements are qualified in their entirety by cautionary statements contained in the company's SEC filings.
Speaker Change: With that I will turn it over to Ken Ken.
Ken Trial: Thank you Maria and good afternoon, everyone. I appreciate you taking the time to join us today.
Ken Trial: I'm going to provide some high level comments on the business and this past quarters results, then turn it over to Mike to go deeper into the financials, Danielle and Jeff will also be available for questions. During the Q&A section.
Ken Trial: When I took over as CEO of Comtech earlier, this year I unveiled a transformation plan and committed to earn the trust of all of our stakeholders I being transparent and delivering on our promises.
Ken Trial: In this spirit I would like to provide an update on my observations and our progress in executing the transformation plan.
Ken Trial: First the update on my observation.
Ken Trial: Overall, while Comtech has faced significant challenges over the past few years. The company also has compelling opportunities that make it worthwhile to address these challenges so that we can capitalize on the upside.
Ken Trial: We'll provide additional perspective on both the challenges and the opportunities ahead.
Ken Trial: Let's review the major challenges the company has been facing.
Ken Trial: We are frankly gratified that we've made significant progress.
Ken Trial: In addressing many of these challenges which include the following first this company has had a burdensome capital structure.
Ken Trial: Tech has a $168 million of senior secured debt with tight financial covenants $65 million of subordinated debt and $200 billion of preferred stock plus additional rights and preferences from each of these securities.
Ken Trial: Second Comtech has an expensive cost structure due to the capital structure organizational design inefficiencies and various legacy factors. The company's historical cost structure has been much too high for the company's recent historical revenue run rate.
Ken Trial: Third.
Ken Trial: Comtech has had.
Ken Trial: Extensive leadership turnover I'm, the fifth CEO to lead Comtech and less than four years other senior leadership positions in the company had been either vacant or in transition.
Ken Trial: Fourth Comtech has had.
Ken Trial: Or operational discipline.
Ken Trial: Weak disciplines have contributed to compliance shortcomings, a lack of accountability outdated products remaining in the product line for too long excessive production costs overly aggressive inventory purchasing and a buildup in working capital has put additional pressure on cash management over the years.
Ken Trial: And fifth misaligned sales incentives the company's commission structure has led in some instances you're taking on unprofitable or very low margin deals and further exacerbated the company's cash burn from excessive working capital commitments.
Ken Trial: There have been other challenges, but that summarizes the big ones.
Ken Trial: Notwithstanding these historical challenges Comtech does have attractive assets and compelling opportunities ahead, which includes the following.
Ken Trial: And satellite and space, a strong market position with deep and long standing relationships across a diversified customer base in both military and commercial end markets.
Ken Trial: Also in satellite and space.
Ken Trial: Comtech has proprietary technology and homegrown expertise that enables the development and supply of some of the world's most advanced modems high power amplifiers proper scatter systems cyber security training and other advanced products and services.
Ken Trial: Third a growing addressable market for satellite and space product offerings that is driven by the emergence of space as a contested military domain. The global demand for resilient secure satellite communications increased demand for high speed connectivity in the emerging international interest.
Ken Trial: Uh huh alternatives to Starwood.
Ken Trial: Fourth our terrestrial and wireless business and retain high quality long term customer relationships with states municipalities and communications carriers, providing critical public safety and emergency response services.
Ken Trial: In T. N. W are growth drivers include customer upgrades for next generation core services, New cloud based emergency response products and increased interest from international carriers for five G location technologies.
Ken Trial: And six finally.
Speaker Change: Hi Tech has a strong and deep talent throughout the organization.
Ken Trial: First of all you have to say that now that I've gotten to work with this team and see them in action over the past few months I'm impressed with the capabilities talent and loyalty at all levels, and corporate and satellite and space and in T. N W.
Ken Trial: Our transformation plan is intended to address the challenges I described earlier, while enabling us to leverage <unk> core strengths and capitalize on the opportunities in each of our businesses I am pleased to report that our transformation plan is gaining traction and notable progress is already.
Ken Trial: Evident in our improved financial performance.
Ken Trial: Before I get into some of the specifics of the quarter I want to highlight that the comtech up today is notably different than the Comtech have just a few months ago.
Ken Trial: There was a new sense of purpose and a sense of urgency lines of responsibility and accountability are clearer today, while the team recognizes the longstanding challenges that I described there is also a share price and what we are accomplishing and both addressing those challenges and embarking on the path to capitalize.
Ken Trial: On the compelling opportunities ahead.
Ken Trial: As we previously announced during the third quarter, we secured a $40 million capital infusion that enabled us to renegotiate terms with our senior secured lenders, which not only waived prior covenant breaches, but provided for the suspension of the fixed charge coverage ratio and the net leverage ratio.
Ken Trial: Covenants through the quarter ending on October 31, 2025. This was an important milestone as it addressed the issue of the Companys prior breaches and improved our financial flexibility going forward.
Ken Trial: It is also a testament to the confidence that our lenders and preferred stockholders have and our transformation plan.
Ken Trial: In addition, we've implemented measures to align accountability throughout the organization.
Speaker Change: Prove operational efficiency streamline our product lines increased gross margins and reduced administrative costs I will give some specifics.
Ken Trial: During the quarter.
Ken Trial: We continue to make progress in reducing costs and implementing additional efficiency measures on the cost front for example, we've reduced our annual labor costs.
Ken Trial: Proximately $33 million to worst workforce reductions since July 31, 2020 for these cost reductions represent the results of product rationalization and organizational streamlining.
Ken Trial: We have simplified the organizational structure through direct reporting lines and they had a direct accountability at the production side.
Ken Trial: We've also continued to streamline our product lines. So we can focus on delivering results on the components that matter.
Ken Trial: In fact, we have discontinued more than 70 products across the satellite and space business. The overall effect is higher margins that result from comparable revenue and lower costs with a more targeted product market focus we have strengthened customer relationships and that's important new business wins for the few.
Ken Trial: Sure.
Ken Trial: Yeah.
Ken Trial: Before I turn to the specific business units and recent developments I want to note that as we stated previously we will only be providing updates on our previously disclosed strategic alternative processes, if and when we have something specific to share at this point there is nothing to share now.
Ken Trial: Now I will provide some comments on our business units, our satellite and space business is executing on initiatives to grow sales of next generation products improved gross margins and reduced operating expenses in this business. We are capitalizing on our differentiated technologies and extensive customer relationships.
Ken Trial: Develop new vectors for growth.
Ken Trial: Recent strategic wins in digital Satcom infrastructure resilient communication programs and strategic multi orbit connectivity.
Ken Trial: Organizational streamlining product rationalization and improved operational discipline have contributed to lower costs, while also helping to improve accountability.
Ken Trial: At level and enhance our focus on priority products production and customer commitments.
Daniel Kaczynski: Additionally, as part of our commitment to improving operational discipline Keith block recently joined the satellite based leadership team from General work dynamics as the New segment, Chief operating officer reporting to Daniel Kaczynski.
Daniel Kaczynski: While I am pleased with the pace and trajectory of our progress this quarter, our satellite and space business has underperformed in recent quarters and we have more work to do.
Daniel Kaczynski: <unk> previously disclosed at a large multi year GFS SAR contract was under protest on May 20th U S. Army informed us that it decided to award the contract to the incumbent.
Daniel Kaczynski: Removed all associated orders from our funded backlog, which had the effect of $36 million. The booking this quarter, excluding the de bulking, the satellite and space businesses book to Bill ratio was higher this quarter than it was in the second quarter of this year, while the loss of this contract has the aforementioned impact.
Ken Trial: On bookings backlog and future revenue.
Ken Trial: He noted that this GSM GFS or contract had very low scrap gross margin expectations.
Ken Trial: On April nine we announced that following months of rigorous testing and performance validation. We've completed initial deliveries of context next generation VSAT systems. So strategically strategically significant Allied Navy partner. This partner selected our systems for inclusion and its comprehensive program.
Ken Trial: To modernize it ships submarines and ground base stations deliveries are expected to continue over the next two years.
Ken Trial: And before moving on to T N W. As discussed in more detail in our Form 10-Q filing today in late May 2025, we've received a request for information from the director of Defense trade controls often referred to as the D. T C. Its request relates to voluntary.
Ken Trial: <unk> that we already submitted to the government back in 2024 related to the potential misclassification of certain variants of our modems since making these voluntary disclosures we've taken internal corrective actions and are seeking licenses under the more restrictive I talk classification for future X.
Ken Trial: Ports were supporting the D. T T. Six review of the matter and we'll provide updates as they occur.
Ken Trial: The terrestrial and wireless business had a strong quarter.
Ken Trial: <unk> to the prior year period, DSW experienced higher net sales of next generation 911 services and location based solutions offset in part by lower net sales of call handling solutions BMW did better this quarter on many key metrics, including operating income net income and adjusted EBITDA.
Ken Trial: <unk> than it did last quarter in the prior.
Ken Trial: Well as in the prior year period, our position as a trusted leader in handling emergency response assistance requests situations, that's well, but delivering similar solutions through new devices and new delivery methods. The key drivers for growth. In this segment are expected to include new cloud based emergency response products.
Ken Trial: An increased interest from international carriers in our five G location technologies.
Ken Trial: I'm also pleased to report that the development of our latest next generation 911 call handling solution is nearly complete we anticipate launching this important new product later this month at the National Emergency Number Association conference or next generation 911 call handling product.
Ken Trial: It's designed to leverage cloud and AI capabilities to serve first responders in the U S, Canada, and Australia, even better than the existing solutions.
Ken Trial: As a concluding comment I want to highlight that when I took over as CEO I've made it clear that the company needs to pay advertise returning to positive cash flow it.
Ken Trial: It is a significant milestone company generated GAAP cash flow from operations of a positive $2 $3 million. This quarter. This is the first quarter the contact generated positive GAAP cash flow from operations in the past eight quarters.
Ken Trial: Finally, I want to express my gratitude to our entire dedicated team as well as all of our stakeholders for their loyalty perseverance and contributions.
Ken Trial: <unk> the most gratifying aspect of my job is when I hear from our employees, our partners and our customers, who loves contact and feel the energy and optimism that comes from a renewed sense of purpose and the progress along a positive trajectory to a successful future for comtech.
Mike: And with that I'll turn the call over to Mike to walk through the financials Mike.
Mike: Thank you Ken before getting into the detailed results I would like to first summarize this past quarter for Ya sequentially.
Ken Trial: Sequentially, our consolidated GAAP results were better than our second quarter of fiscal 2025.
Ken Trial: We experienced a better mix of higher gross margin business.
Ken Trial: Lowered our operating expenses increased our EBITDA and achieve positive cash flows from operations.
Ken Trial: The T N W segment continues to perform well and our satellite and space Communications segment reported improved Bottomline results.
Ken Trial: While more work is needed we are encouraged by another good quarter of meaningful progress.
Ken Trial: Now, let's turn to the key metrics for this past quarter consolidated net sales were $126 8 million.
Ken Trial: Compared to $128 $1 million a year ago and.
Ken Trial: $126 6 million in Q2 of fiscal 2025.
Ken Trial: Relative to the prior year period net sales this quarter in the TWC segment were higher while the SNF segment was lower.
Ken Trial: Compared to last year, our <unk> segment benefited from higher sales of our N. G 91 services as we continue to migrate customers do their implementation phases onto recurring services.
Ken Trial: Compared to last year net sales in our SNF segment reflect lower sales of our <unk> solutions offset in part by higher sales of our Satcom solutions.
Ken Trial: As discussed on prior earnings calls within our <unk> product line. Our legacy next generation Trump is kind of contracts with the Marines and army are winding down as anticipated.
Ken Trial: Collectively these two programs accounted for approximately $13 million of quarter over quarter reduction in net sales.
Ken Trial: Such reduction was substantially offset though by increased sales of VSAT equipment to the U S Army and increased sales of our satellite ground infrastructure solutions.
Ken Trial: Sequentially T N W. As net sales increased 12% to $59 $2 million net sales in this segment for the third quarter of fiscal 2025 included over $3 million of incremental N. G 911 services revenue due to reaching an agreement with a statewide customer to retroactively invoice for certain recurring services.
Ken Trial: We have provided for in the past.
Ken Trial: Without this adjustment net sales in this segment increased sequentially about 6%.
Ken Trial: Gross margins in this segment both in terms of dollars and percentage also benefited from such activity in Q3 as the associated costs of providing such services, where most of the expense in prior periods.
Ken Trial: Given the cumulative catch up nature of such activity, we do not expect it to repeat in Q4.
Ken Trial: Sequentially <unk> net sales decreased eight 3% to $67 $6 million as the prior second quarter of fiscal 2025 included higher sales of low margin VSAT equipment to the U S Army.
Ken Trial: Although net sales were down in the third quarter. The SNF segment was successful in achieving a more favorable product mix, resulting in an improved gross profit percentage compared to last quarter.
Ken Trial: Overall on a consolidated basis gross margin was 37% in Q3 as compared to 34% a year ago.
Ken Trial: Gross margin in the more recent quarter also improved sequentially from the 26, 7% reported in Q2 <unk>.
Ken Trial: Consolidated net bookings were $71 million in the third quarter.
Ken Trial: Our consolidated book to Bill ratio, a measure defined as bookings divided by net sales for the three months ended April 32.
Ken Trial: 225 was five six times.
Ken Trial: Bookings in the more recent quarter reflect a $36 4 million bookings related to the low margin U S Army <unk> contract that Ken just referenced gross.
Ken Trial: Gross bookings for the quarter. Excluding this de booking were $107 4 million, representing a quarterly book to Bill ratio of <unk> 85 times.
Ken Trial: Our consolidated operating loss for Q3 decreased to $1 5 million compared to a $3 5 million operating loss in Q3 of last year, and a $10.3 million operating loss last quarter in Q2.
Ken Trial: The sequential improvement this quarter is due to a more favorable sales mix and benefit of our cost reduction initiatives lowering our overall operating expenses.
Ken Trial: As reconciled in our Form 10-Q for the quarter, we utilize a non-GAAP measure that we referred to as adjusted EBITDA.
Ken Trial: Consolidated adjusted EBITDA for Q3 increased to $12 6 million compared to $11 $9 million in Q3 of last year and $2 $9 million in Q2.
Ken Trial: Last quarter.
Ken Trial: I just mentioned our Q3 results included an incremental benefit to net sales and gross profit within our <unk> segment that we do not anticipate anticipate repeating.
Ken Trial: Turning to the balance sheet as highlighted on our prior earnings call, we amended our credit facility and subordinated credit facility to among other things waived all defaults, specifically the net leverage ratio and fixed charge coverage ratio suspend testing of these covenants until October 31 2025.
Ken Trial: We reduced the interest rate on the term loan and the revolver alone.
Ken Trial: Reduced the minimum quarterly average liquidity requirement to 17 and a half million dollars.
Ken Trial: And allow for the new $40 million capital infusion in the form of subordinated debt.
Ken Trial: Of the subordinated debt proceeds received $27 3 million and $9 $1 million, respectively. Net of fees were used to repay prepay without penalty a portion of the term loan and revolver loan outstanding under the credit facility with $3 $2 million of the revolver repayment, representing a permanent reduction.
Ken Trial: <unk> commitment related to the revolver.
Ken Trial: Apple April 30th 2025, and June 6th 2025, total outstanding borrowings under the credit facility were $168 million, including $23 4 million drawn on our revolver.
Ken Trial: As of the June as of June six our available sources of liquidity approximately $27 3 million.
Ken Trial: Consisting of qualified cash and cash equivalents and the remaining available portion of the revolver.
Ken Trial: As of April 30th 225, total outstanding borrowings under the subordinated facility was $65 million, excluding accreted interest in make whole adjustments and the liquidation preference of our outstanding convertible preferred stock was $199 $7 million, excluding potential increases kind of liquidation.
Ken Trial: <unk> and other obligations that could be triggered by.
Ken Trial: On the other things breaches of covenants asset sales <unk> change in control of the company.
Ken Trial: Yeah.
Ken Trial: With respect to receivables, our consolidated net unbilled balance approximated $73 million as of April 32025.
Ken Trial: Up slightly from the approximate $69 million last quarter, but substantially down from the $123 $7 million as of July 31 2024.
Ken Trial: The sequential increase is due to the timing of the aforementioned retroactive and G 911 milestone billing in the PNW segment, which is anticipated to occur in Q4.
Ken Trial: And the decrease from last year is largely due to the aforementioned wind down of our next generation triple scatter contracts as anticipated as well as a bad debt reserve established earlier in fiscal 2025 related to an international customer.
Ken Trial: In Q3, we generated as Ken mentioned $2 3 million of positive consolidated operating cash flows on a GAAP basis.
Ken Trial: Operating cash flows for the quarter included close to $7 million in aggregate cash payments, mostly at the parent level for restructuring costs, including severance CEO transition costs and professional fees related to the modification of our subordinated credit facility on March 3rd.
Ken Trial: Thus cash flows for the quarter would have been higher without these items.
Ken Trial: Now, let me turn the call back over to Ken Ken.
Ken Trial: Thank you Mike.
Ken Trial: To summarize.
Ken Trial: First.
Ken Trial: We recognize comtech has longstanding challenges much of which we have already made strong progress in resolving.
Ken Trial: Second.
Ken Trial: Tech is strong assets and compelling opportunities for growth and value creation and.
Ken Trial: And third and finally, we have already made significant progress in executing on our transformation plan, which is already resulting in improved financial performance enhanced accountability and improved price and the future of Comtech.
Speaker Change: Operator, please open the call to questions.
Speaker Change: Certainly at this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may withdraw yourself from the queue at any time by pressing star two.
Speaker Change: And we will take our first question from Greg Burns with Sidoti.
Ken Trial: Your line is open.
Ken Trial: Okay.
Speaker Change: Greg you may need to check the mute function on your device.
Ken Trial: Okay.
Ken Trial: Greg Burns your line is open.
Ken Trial: Yeah.
Speaker Change: Hearing none we'll move to Mike Crawford with B Riley. Your line is now open.
Mike Crawford: Thank you.
Speaker Change: Satellite and space, there's a number of next generation digital back end modems that are under development, including Adam and can you just walk through where you stand on development acceptance potential to full rate production for some of these most important platforms.
Daniel Kaczynski: Thanks, Mike, we'll let Daniel.
Daniel Kaczynski: Take that question.
Speaker Change: Yes. Thanks for the question I think really.
Speaker Change: A really important one I'll try and briefly summarize some of the progress we've made on the next generation digital platforms, and where we are in that transition.
Speaker Change: As pointed out we do have a number of products under development, one of which is with the U S Army under the <unk> program.
Speaker Change: We continue to make good progress in the development of that.
Speaker Change: There is still some ongoing work that we're expecting to see complete completed prior to moving into.
Speaker Change: A joint certification phase with the U S Army.
Speaker Change: There's still a couple of them.
Speaker Change: Determinant dates that we have based on inputs from subcontractors, but we are expecting to make significant progress.
Speaker Change: And moving towards certification prior to the end of the calendar year.
Speaker Change: In terms of other products in the portfolio. We've made really strong progress in some of the variants Amit actually have early production units that have been deployed to.
Speaker Change: A couple of key select customers for.
Speaker Change: Several of the products within that family.
Speaker Change: Okay. Thank you and then just.
Speaker Change: Switching.
Speaker Change: Here's to the 911 business are there any outstanding.
Speaker Change: Competitions that you're tracking or award and submitted that you're waiting a decision on for that business.
Mike Crawford: Thanks, Mike what we'll we'll let Jeff handle that one.
Speaker Change: Thanks for the question Mike.
Speaker Change: The simple answer to your question is yes, there's a number of them.
Speaker Change: The.
Speaker Change: RFP process, obviously with competition.
Speaker Change: We prefer not to comment on which ones we're in but there's a number of <unk>.
Speaker Change: Compelling bids.
Speaker Change: Yeah.
Speaker Change: We're waiting on.
Speaker Change: Okay.
Speaker Change: Oh, okay.
Speaker Change: And then.
Speaker Change: Just in terms of the current quarter that we're about halfway through or how would you characterize it.
Speaker Change: Bookings so.
Speaker Change: So far in this quarter and is there any.
Speaker Change: Any thought on how the.
Speaker Change: The second half of the quarter might look like.
Speaker Change: We're not going to work.
Speaker Change: Vote of giving guidance, Mike and so at this stage in the quarter, where we're really not going to comment on Q4.
Speaker Change: Okay. Thank you.
Speaker Change: Okay.
Speaker Change: And once more that its star and one.
Speaker Change: And well move to Greg Burns with Sidoti Your line is open.
Greg Burns: Hi, good afternoon.
Speaker Change: The number of products that you're.
Speaker Change: Discontinued satellite.
Speaker Change: Sean good business, how much revenue is going to be gone away over the next I.
Speaker Change: I guess over what timeframe.
Speaker Change: Yeah, well, we don't expect it to be a material impact on revenue, but I'll, let Dan youll get into the specifics on.
Speaker Change: What we cut and what we expect the impact today.
Speaker Change: Absolutely. Thank you for the question, Yes, I think we discussed.
Speaker Change: In previous earnings calls that we had expected the.
Speaker Change: In fact, as a result of some of these discontinued products.
Speaker Change: Maybe less than 10% of the satellite in space segment revenue.
Speaker Change: That still aligns with our expectations and I think ultimately we've seen.
Speaker Change: As we discontinued a number of these products, it's allowed us to emphasize development.
Speaker Change: And.
Speaker Change: Production of some of the newer later generation products that come at a slightly higher margin I think ultimately.
Speaker Change: No material changes expected as a result of above what has previously been discussed to revenue as a result of discontinuing those products.
Speaker Change: Okay.
Greg Burns: Hi, Greg.
Greg Burns: Yes.
Speaker Change: Consistent with a strategy of a focus where we are.
Speaker Change: Deliberately eliminating product lines that are.
Speaker Change: Either obsolete or low margin, enabling us to focus better on those products that we can deliver to customers.
Speaker Change: Better solutions at fair and appropriate margins.
Speaker Change: So this we hope will result in.
Speaker Change: Better service to customers more satisfied customers and improve gross margins.
Speaker Change: Okay.
Speaker Change: And in terrestrial wireless.
Speaker Change: So revenues.
Speaker Change: Relatively flat there for a while and you've mentioned some some growth opportunities there so let's see outlook.
Speaker Change: In terms of maybe you.
Speaker Change: Returning that segment.
Speaker Change: To growth.
Speaker Change: Do you have any initiatives in place to improve the margins from that business.
Jeff: Jeff you want to get into some more specifics there.
Jeff: Yes, sure Greg I think.
Speaker Change: The first part of your questions as growth in <unk>.
Speaker Change: So we don't comment on financial performance and growth, but I will tell you from a strategy perspective.
Speaker Change: We do see in our.
Speaker Change: What we call our <unk> business.
Speaker Change: Any growth opportunity in the international carrier markets, especially in <unk> with some of the services, we provide the carriers in North America.
Speaker Change: We're seeing great.
Speaker Change: Great move there which will.
Speaker Change: From a growth perspective.
Speaker Change: We also see and are looking at launching some new products you've seen our announcement of a new cloud based call handling product that would entrust into a new segment of the market and open up other markets for us with that so.
Speaker Change: Those are probably the main drivers for growth.
Speaker Change: On the margin part of your question.
Speaker Change: We do believe we are looking very very hard at the architecture and the ways, we deploy our nextgen now and one.
Speaker Change: That works, both historically and in the future for our new customers.
Speaker Change: And do you believe we can.
Speaker Change: Do a better job on our margin performance. There also when you when deploying cloud based products, usually has a different margin profile, which I'm counting on to be positive, but we havent necessarily deploying dose yet that's a new product.
Speaker Change: Target for you.
Speaker Change: Thanks, Ed.
Speaker Change: Operator.
Speaker Change: EBITDA margin or operating margin perspective.
Speaker Change: At this time I, probably wouldn't want to comment on that publicly but.
Speaker Change: Yes, I would say just from my comments that on.
Speaker Change: On the strategy.
Speaker Change: Okay.
Speaker Change: Alright, thank you.
Speaker Change: Okay.
Speaker Change: And it does appear that there are no further questions. At this time I would now like to turn it back to the company for any additional or closing remarks.
Speaker Change: We'd like to thank you for your continued interest and support of Comtech and look forward to reporting.
Speaker Change: Next quarter and beyond Thank you all for your support and interest in contact.
Speaker Change: Yeah.
Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful afternoon.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Hum.
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