Comtech Telecommunications Corp (CMTL) 2025 Q2 法說會逐字稿

Welcome to Comtech Telecom Corp's conference call for the second quarter of fiscal 2025. As a reminder, this conference is being recorded.

歡迎參加 Comtech Telecom Corp 2025 財政年度第二季電話會議。提醒一下，本次會議正在錄製中。

I would now like to turn the conference over to Maria Ceriello, Senior Director of Financial Operations of Comtech. Please go ahead, Maria.

現在，我想將會議交給 Comtech 財務營運高級總監 Maria Ceriello。請繼續，瑪麗亞。

Thank you, operator, and thanks, everyone for joining us today. I'm here with Ken Traub, Comtech's Chairman, President and CEO; Mike Bondi, CFO; Daniel Gizinski, President of the Satellite and Space Communications Business; and Jeff Robertson, President of the Terrestrial and Wireless Networks Business.

謝謝接線生，也謝謝大家今天的參與。我和 Comtech 董事長、總裁兼執行長 Ken Traub 一起在場；財務長 Mike Bondi；衛星和太空通訊業務總裁 Daniel Gizinski；以及地面和無線網路業務總裁傑夫羅伯遜（Jeff Robertson）。

Before we get started, please note we have a detailed discussion of the quarter in the press release we issued this afternoon, which is available on our website. 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 plan's objectives and business outlook of the company's management.

在我們開始之前，請注意我們在今天下午發布的新聞稿中對本季度進行了詳細的討論，該新聞稿可在我們的網站上查閱。本次電話會議中提供的某些資訊將包括但不限於與公司未來業績和財務狀況、公司計劃、目標和業務前景以及公司管理層的計劃目標和業務前景有關的資訊。

The company's assumptions regarding such performance, business outlook, and plans are forward-looking in nature and always involve significant risks and uncertainties. Actual results could differ materially from forward-looking information. Any forward-looking statements are qualified in their entirety by questionary statements contained in the company's SEC filings.

本公司對此類業績、業務前景和計劃的假設本質上是前瞻性的，並且始終涉及重大風險和不確定性。實際結果可能與前瞻性資訊有重大差異。任何前瞻性陳述均完全受本公司提交給美國證券交易委員會 (SEC) 的文件中問卷陳述的限制。

With that, I will turn it over to Ken. Ken?

說完這些，我會把麥克風交給肯。肯？

Thank you, Maria, and good afternoon, everyone. I appreciate you taking the time to join us today. Comtech's last conference call was on January 13, 2025, which was also my first day in the role as President and CEO of the company.

謝謝你，瑪麗亞，大家下午好。感謝您今天抽出時間參加我們的活動。Comtech 的最後一次電話會議是在 2025 年 1 月 13 日，也是我擔任公司總裁兼執行長的第一天。

I had joined the company shortly before that as an Independent Director on October 31 and then assumed the role of Executive Chairman on November 26. So I had a little bit of experience with the company when I shared my perspectives that day. A point I emphasize on that conference call, as I have done consistently since then with all of Comtech's stakeholders, is that I believe earning trust is the most essential ingredient for success in business. I stated specifically that frankly, the Comtech organization has work to do to earn trust in light of its historically poor track record of financial performance and missed expectations. Our goal is to earn the trust of all of our stakeholders, and we intend to do that by being transparent, holding ourselves accountable, and delivering on our promises.

不久之前，我於 10 月 31 日加入公司，擔任獨立董事，並於 11 月 26 日擔任執行董事長。所以那天當我分享我的觀點時，我對這家公司有了一點了解。在那次電話會議上，我強調的一點是，正如我從那時起對 Comtech 的所有利益相關者所做的那樣，我相信贏得信任是商業成功的最重要因素。我特別指出，坦白說，鑑於 Comtech 歷史上糟糕的財務業績記錄和未達到預期，該公司需要努力才能贏得信任。我們的目標是贏得所有利害關係人的信任，我們打算透過透明、負責和兌現承諾來實現這一目標。

On January 13, we were clear and direct. Comtech's recent financial performance was unacceptable. Further, we disclosed our expectation at that time. The company anticipates breaching financial covenants at the end of the quarter on January 31, and this could have significant consequences for the company.

1 月 13 日，我們的表態明確而直接。科泰最近的財務表現令人無法接受。此外，我們當時披露了我們的預期。該公司預計將於 1 月 31 日本季末違反財務契約，這可能會對公司產生重大後果。

In light of the company's challenges, I announced a comprehensive transformation plan. The key pillars of that transformation plan are: number one, improving operational discipline and reducing the cost structure; number two, supporting the growth and development of successful high margin business initiatives; third, conducting a broad review of strategic alternatives; fourth, strengthening the company's capital structure; and fifth, promoting a corporate culture centered on taking pride in our transformation, resulting in enhanced employee morale and productivity.

鑑於公司面臨的挑戰，我宣布了一項全面的轉型計劃。此轉型計畫的關鍵支柱是：第一，改善營運紀律並降低成本結構；第二，支持成功的高利潤業務計畫的成長和發展；第三，廣泛審查策略選擇；四是加強公司資本結構；第五，推動以轉型為榮的企業文化，提高員工士氣和工作效率。

The early evidence that this transformation plan is gaining traction and credibility is the series of transactions we announced last week to improve the company's capital structure. As anticipated, the company actually did breach the net leverage ratio and the fixed charge coverage ratio covenants as of January 31 by a substantial margin, which put the company in default on the senior secured term loan, the revolving line of credit, and the subordinated debt. These were problems that needed to be solved.

我們上週宣布的一系列旨在改善公司資本結構的交易就是這項轉型計畫正在獲得支持和信任的早期證據。正如預期的那樣，截至 1 月 31 日，該公司確實大幅違反了淨槓桿率和固定費用覆蓋率契約，導致該公司拖欠優先擔保定期貸款、循環信貸額度和次級債務。這些都是需要解決的問題。

Fortunately, we've developed strong relationships of trust and confidence with the company's secured creditors, as well as its preferred shareholders and subordinated debt holders. We demonstrated to each of them the merits of our transformation plan and the progress we are making in executing on that plan. Consequently, they agreed to support the company in new transactions that not only cured the prior breaches but improves the company's financial flexibility going forward.

幸運的是，我們與公司的有擔保債權人以及優先股股東和次級債持有人建立了牢固的信任關係。我們向他們每個人展示了我們的轉型計劃的優點以及我們在執行該計劃方面取得的進展。因此，他們同意支持該公司進行新的交易，這不僅可以彌補先前的違規行為，還可以提高公司未來的財務彈性。

This included a new capital infusion of $40 million in the form of subordinated debt, the proceeds of which were used to pre-pay a portion of the senior secured credit facility. The lenders agreed to waive the pre-payment fees that would have been due in accordance with the terms of the credit agreements and agreed to grant waivers, drew the breaches that already occurred for the quarter ended January 31 and agreed to suspend certain financial covenant testing until after the quarter ending October 31, 2025.

其中包括以次級債務的形式註入 4,000 萬美元的新資本，其收益用於預付部分優先擔保信貸額度。貸款人同意免除根據信貸協議條款到期應付的預付費用，並同意給予豁免，提取截至 1 月 31 日的季度已經發生的違約行為，並同意暫停某些財務契約測試，直至 2025 年 10 月 31 日的季度之後。

I would like to emphasize that gaining the support of our lenders and creditors in these transactions was the result of demonstrating that each element of our transformation plan has merit. While you see evidence of the progress of some of these initiatives and the results discussed today, we do anticipate we will be showing even more demonstrable progress on each of the pillars of our transformation plan in the coming quarters.

我想強調的是，在這些交易中獲得貸款人和債權人的支持是我們證明轉型計劃的每個要素都有其優點的結果。雖然您看到了其中一些舉措取得進展的證據以及今天討論的結果，但我們確實預計，在未來幾個季度，我們將在轉型計劃的每個支柱上取得更加明顯的進展。

Before we discuss the specific business units and recent developments, I want to comment briefly on our previously disclosed process to broadly explore strategic alternatives. As an update, we have engaged Imperial Capital for the review of strategic alternatives for the terrestrial and wireless business, and we have engaged TD Cowen for the review of strategic alternatives for the rest of the company, including the satellite and space business. We will provide updates on these processes only if and when we have something specific to share.

在我們討論具體的業務部門和最近的發展之前，我想簡要評論一下我們之前披露的廣泛探索戰略替代方案的過程。作為最新消息，我們已聘請 Imperial Capital 審查地面和無線業務的戰略替代方案，並聘請 TD Cowen 審查公司其他部分（包括衛星和太空業務）的戰略替代方案。只有當我們有具體內容要分享時，我們才會提供這些流程的更新。

Now we'll provide some comments on our business units. Our satellite and space business has underperformed in recent quarters and has been in need of a turnaround. Daniel Gizinski was appointed President of this business on November 19, 2024. And he's doing a great job of addressing historic issues that have undermined performance and is developing a new approach to optimize the business and drive future profitability and value.

現在我們將對我們的業務部門提供一些評論。我們的衛星和太空業務在最近幾季表現不佳，需要扭轉局面。丹尼爾·吉津斯基 (Daniel Gizinski) 於 2024 年 11 月 19 日被任命為該公司總裁。他在解決影響業績的歷史遺留問題方面做得非常出色，並且正在開發一種新方法來優化業務並推動未來的獲利能力和價值。

Some examples of this new approach include: number one, offering a refocused product portfolio that emphasizes differentiated higher margin offerings; second, instituting clear lines of accountability, resulting in more effective operational discipline; third, implementing more disciplined approval policies for purchasing and inventory management; fourth, highlighting customer value proposition, enabling improved pricing in terms; fifth, adding strong product management capabilities to ensure alignment among engineering, product quality and customer expectations; sixth, eliminating slow moving and low margin SKUs; and seventh, launching next generation products with validated customer demand.

這種新方法的一些例子包括：第一，提供重新調整的產品組合，強調差異化、高利潤的產品；第二，建立明確的責任制度，提高經營紀律的有效性；三是實施更嚴格的採購和庫存管理審批政策。第四，突顯顧客價值主張，進而改善定價條件；第五，增加強大的產品管理能力，確保工程、產品品質和顧客期望的一致性；第六，淘汰滯銷、低利潤的SKU；第七，推出符合顧客需求的下一代產品。

The positive impact of these actions are already bearing fruit as starting to be reflected in the second quarter results that Mike will describe shortly. As for the validation of our progress, on March 10, we announced that our customer, L3Harris, awarded Comtech sole source contracts in excess of $26 million for advanced next generation anti-jam modems supporting the US Army and the US Air Force. Daniel will provide further details on how all of these actions are better positioning the satellite and space business going forward.

這些行動的正面影響已經初見成效，並開始反映在麥克即將描述的第二季業績中。至於我們進展的驗證，3 月 10 日，我們宣布我們的客戶 L3Harris 授予 Comtech 超過 2600 萬美元的獨家合同，為美國陸軍和美國空軍提供先進的下一代抗干擾調製解調器。丹尼爾將提供更多細節，說明所有這些行動如何更好地定位未來的衛星和太空業務。

The terrestrial and wireless business continues to perform well and is poised for growth due to the planned launch of new cloud-based emergency response products and increased interest from international carriers around our proven 5G location technologies. T&W generally performed in line with our expectations for this quarter, while the reduced level of performance was primarily attributed to a one-time implementation delay in Q2, as well as to quarterly variations in deployment timing and sales cycles. We remain confident in the position of this business and strong backlog and continue to take steps to enhance its strategic potential.

地面和無線業務繼續表現良好，並有望實現成長，這得益於計劃推出新的基於雲端的緊急應變產品，以及國際營運商對我們成熟的 5G 定位技術的興趣日益濃厚。T&W 本季的業績整體符合我們的預期，業績下滑主要歸因於第二季的一次性實施延遲，以及部署時間和銷售週期的季度變化。我們對這項業務的地位和強大的積壓訂單充滿信心，並將繼續採取措施增強其策略潛力。

Now, before I turn the call over to Mike to go through the financials, I wanted to take a moment to talk about our corporate culture. The Comtech organization has had a challenging run over the past few years. I know it has been difficult and frustrating for all of our employees. But it is really gratifying to see how the corporate culture is starting to brighten as employees are increasingly taking pride in the positive trajectory toward a stronger and healthier future for Comtech.

現在，在我將電話轉給麥克討論財務狀況之前，我想花點時間談談我們的企業文化。在過去幾年裡，Comtech 組織經歷了一段充滿挑戰的時期。我知道這對我們所有員工來說都是困難和令人沮喪的。但看到企業文化開始變得更加明亮，員工們越來越為康泰克走向更強大、更健康的未來而感到自豪，確實令人欣慰。

I am proud to lead the Comtech organization. And I hope every employee, partner and stakeholder shares in my enthusiasm and embarking on the journey for a successful future for Comtech. Mike is going to review Comtech's finances now, followed by Daniel and Jeff's discussion of the business segments they lead. I'll have some closing remarks, and then we'll open the call for questions. Mike?

我很榮幸能夠領導 Comtech 組織。我希望每位員工、合作夥伴和利害關係人都能分享我的熱情，一起踏上 Comtech 成功未來的旅程。麥克現在要審查康泰克的財務狀況，然後丹尼爾和傑夫將討論他們所領導的業務部門。我將做一些結束語，然後我們將開始提問。麥克風？

Thank you, Ken. Before getting into the detailed results, I would like to first summarize this past quarter for you.

謝謝你，肯。在了解詳細結果之前，我想先為您總結過去一個季度。

Overall, our GAAP results were significantly better sequentially than our first quarter of fiscal 2025. While this reflects some meaningful operational improvements, it is primarily due to the fact that the first quarter included several large non-cash charges and write downs, which did not repeat in this more recent quarter.

整體而言，我們的 GAAP 業績環比明顯優於 2025 財年第一季。雖然這反映了一些有意義的營運改進，但這主要是因為第一季包含了幾項大額非現金費用和減值，而最近一個季度並未出現這種情況。

The T&W segment continues to perform well, and our satellite and space communication segment reported significantly improved results on both its top and bottom lines. While we are encouraged by the results, we believe the transformation plan that Ken described will be key to achieving further improvements.

T&W 部門持續表現良好，我們的衛星和太空通訊部門的營收和利潤均顯著改善。雖然我們對結果感到鼓舞，但我們相信肯所描述的轉型計畫將是實現進一步改進的關鍵。

Now, let's turn to the key metrics for this past quarter. Consolidated net sales were $126.6 million compared to $134.2 million a year ago and $115.8 million in Q1 of fiscal 2025. Net sales in both segments were lower this past quarter relative to the prior year period.

現在，讓我們來看看上個季度的關鍵指標。合併淨銷售額為 1.266 億美元，去年同期為 1.342 億美元，2025 財年第一季為 1.158 億美元。與去年同期相比，這兩個部門上一季的淨銷售額均有所下降。

Compared to last year, nets sales in our satellite and space segment during Q2 reflected lower net sales of our Troposcatter Solutions, all set in part by higher net sales of our SATCOM solutions and satellite ground infrastructure solutions. As discussed in our prior earnings call, in fiscal 2024, within our Troposcatter product line, our next generation Troposcatter contracts with the US Marine Corps and Army were in full swing with respect to procurement and manufacturing.

與去年相比，第二季度我們衛星和太空部門的淨銷售額反映了我們的對流層散射解決方案的淨銷售額下降，部分原因是我們的衛星通訊解決方案和衛星地面基礎設施解決方案的淨銷售額增加。正如我們在先前的收益電話會議上所討論的那樣，在 2024 財年，在我們的對流層散射產品線中，我們與美國海軍陸戰隊和陸軍的下一代對流層散射合約在採購和製造方面正在全面展開。

Today, these contracts have significantly progressed, allowing us to begin invoicing and collecting on the unbuilt receivables that we had built up in fiscal 2024. Collectively, these two programs accounted for approximately $11 million of the quarter over quarter reduction in net sales.

如今，這些合約已取得重大進展，使我們能夠開始開立發票並收取 2024 財年累積的未建成應收帳款。這兩個項目合計造成本季淨銷售額季減約 1,100 萬美元。

During Q2 of last year, we also had a large sale of Tropo gear to an international customer, which did not repeat this quarter, and which accounted for approximately $7 million of the decrease in that sales. As for offsetting increases in that sales during the more recent quarter as compared to last year, satellite in space experienced an uptick in equipment sales to the US Army during the period. For example, under the VSAT III IDIQ contract, as well as from the delivery on an equipment order previously received under the US Army GFSR contract when it was not under protest.

去年第二季度，我們也向一位國際客戶大量銷售了 Tropo 裝備，但本季沒有再發生這種情況，這導致銷售額下降了約 700 萬美元。與去年相比，最近一個季度的銷售額有所增加，而為了抵消這一增長，太空衛星向美國陸軍的設備銷售額在此期間有所上升。例如，根據 VSAT III IDIQ 合同，以及根據美國陸軍 GFSR 合約先前收到的設備訂單交付時（當時沒有提出抗議）。

Net sales in the satellite and space segment were $73.7 million in the second quarter, a 25% sequential increase, driven primarily by higher sales of SATCOM solutions to the US Army. Importantly, our operational improvement initiatives have shown appreciable progress, as reflected in our segment margins, which also increased sequentially.

第二季衛星和太空部門的淨銷售額為 7,370 萬美元，較上季成長 25%，主要原因是向美國陸軍銷售的 SATCOM 解決方案銷售額增加。重要的是，我們的營運改善措施已取得顯著進展，這反映在我們的分部利潤率上，也實現了環比成長。

Net sales in the T&W segment were $52.9 million, a decrease of 5% from the prior year and a decrease of 7% from last quarter. This is primarily due to the repositioning to sell our 5G and related location-based solutions internationally and the timing of our performance on statewide NG911 and call handling contracts. Specifically, compared to last year, our T&W results reflect lower net sales of our location-based solutions and next gen 911 services while set in part by higher sales of our call handling solutions.

T&W 部門淨銷售額為 5,290 萬美元，較上年下降 5%，較上季下降 7%。這主要是因為我們重新定位在國際上銷售我們的 5G 和相關的基於位置的解決方案，以及我們在州範圍的 NG911 和呼叫處理合約上的履行時間。具體來說，與去年相比，我們的 T&W 業績反映出我們基於位置的解決方案和下一代 911 服務的淨銷售額下降，而部分原因是我們的呼叫處理解決方案的銷售額增加。

Consolidated (technical difficulty) long-term contracts within our T&W segment in prior periods which were not expected to repeat this quarter. Our consolidated book to build ratio, a measure defined as bookings divided by net sales for the three months end of January 31, 2025, was 0.63 and was roughly the same ratio for each of our segments.

我們 T&W 部門前期簽訂的合併（技術難度）長期合約預計本季不會重複出現。我們的合併訂單與建造比率（定義為截至 2025 年 1 月 31 日的三個月的訂單量除以淨銷售額）為 0.63，與我們各部門的比率大致相同。

Comtech's consolidated gross margins for the quarter were 26.7% compared to 32.2% in the second quarter of fiscal '24. Gross profit in the more recent quarter significantly improved from the 12.5% reported in the immediately preceding quarter, due in part to an $11.4 million non-cash charge in the first quarter of fiscal 2025 in the S&S segment related to the write down of inventory.

康泰本季的綜合毛利率為 26.7%，而 24 財年第二季為 32.2%。最近一個季度的毛利較上一季的 12.5% 大幅提高，部分原因是 S&S 部門在 2025 財年第一季計入了 1,140 萬美元的非現金費用，與庫存減記有關。

Consolidated operating loss was $10.3 million in the second quarter compared to operating income of $3 million in the prior year period. Operating loss in the more recent quarter significantly improved from the $129.2 million operating loss reported in the immediately preceding quarter, due in large part to a $79.6 million non-cash charge in the first quarter of fiscal 2025 in the S&S segment related to the impairment of goodwill.

第二季綜合營業虧損為 1,030 萬美元，而去年同期的營業收入為 300 萬美元。最近一個季度的營業虧損較上一季度報告的 1.292 億美元營業虧損有顯著改善，這在很大程度上是由於 S&S 部門在 2025 財年第一季發生了 7,960 萬美元的非現金費用，與商譽減損有關。

As explained in more detail and reconciled in our Form 10-Q for the quarter, we utilize a non-GAAP measure that we refer to as adjusted EBITDA. Consolidated adjusted EBITDA was $2.9 million in the second quarter compared to adjusted EBITDA of $15.1 million in the prior year period.

正如我們在本季度的 10-Q 表中更詳細地解釋和調節的那樣，我們採用了一種非 GAAP 指標，稱為調整後的 EBITDA。第二季綜合調整後 EBITDA 為 290 萬美元，而去年同期調整後 EBITDA 為 1,510 萬美元。

Adjusted EBITDA in the more recent quarter significantly improved from the adjusted EBITDA loss of $19.4 million in the immediately preceding quarter, due in large part to a $17.4 million non-cash charge in the first quarter of fiscal 2025 in the S&S segment, related to fully reserving for an unbilled receivable.

最近一個季度的調整後 EBITDA 較上一季的 1,940 萬美元調整後 EBITDA 虧損有顯著改善，這在很大程度上是由於 S&S 部門在 2025 財年第一季度產生了 1,740 萬美元的非現金費用，與未開票應收帳款的全額準備金有關。

Turning to the balance sheet, as Ken highlighted in his remarks, we amended our credit facility and subordinated credit facility to, among other things, waive all the faults, specifically the net leverage ratio and fixed charge coverage ratio; suspend testing of these covenants until October 31, 2025; reduce the interest rate on the term loan by 470 basis points and on the revolver loan 215 basis points; reduce the minimum quarterly average liquidity requirement from $20 million to $17.5 million; and allow for the new $40 million dollar capital infusion in the form of subordinated debt from existing holders of our convertible preferred stock and subordinated debt.

談到資產負債表，正如肯在發言中強調的那樣，我們修改了我們的信貸安排和次級信貸安排，其中包括免除所有錯誤，特別是淨槓桿率和固定費用覆蓋率；暫停對這些契約的測試，直至 2025 年 10 月 31 日；將定期貸款利率降低470個基點，將循環貸款利率降低2150 萬美元萬美元；並允許以次級債務的形式從我們可轉換優先股和次級債務的現有持有人注入 4000 萬美元的新資本。

Of the subordinated debt proceeds received $27.3 million and $9.1 million, respectively, net of fees and closing costs were immediately used to pre-pay without penalty a portion of the term loan and revolver loan outstanding under the credit facility, with $3.2 million of the revolver loan repayment representing a permanent reduction in commitment related to the revolver loan. Through the combination of reduced debt balances and lower interest rates, we anticipate saving approximately $5 million in near-term cash interest expense related to the credit facility.

在扣除費用和結算成本後，收到的次級債務收益分別為 2730 萬美元和 910 萬美元，這些收益立即用於預付信貸安排下未償還的部分定期貸款和循環貸款（無罰金），其中 320 萬美元的循環貸款償還代表著與循環貸款相關的承諾的永久性減少。透過減少債務餘額和降低利率，我們預計與信貸安排相關的近期現金利息支出將節省約 500 萬美元。

As of March 10, 2025, our qualified cash and cash equivalents were $21.5 million. Total outstanding borrowings under the credit facility were $168 million of which $23.4 million was drawn on the revolver. Total outstanding borrowings under the subordinated credit facility excluding accreted interest was $65 million. And available sources of liquidity approximated $27.4 million, consisting of both qualified cash and cash equivalents, as well as the remaining portion of the committed revolver.

截至 2025 年 3 月 10 日，我們的合格現金和現金等價物為 2,150 萬美元。該信貸安排下的未償還借款總額為 1.68 億美元，其中 2,340 萬美元為循環信貸額度提取的。次級信貸安排下的未償還借款總額（不包括累計利息）為 6,500 萬美元。可用的流動資金來源約為 2,740 萬美元，包括合格現金和現金等價物，以及已承諾循環信貸的剩餘部分。

As for our consolidated unbilled receivables, we were successful this past quarter in lowering such investments in working capital, decreasing them from $112 million as of October 31, 2024, to $86 million as of January 31, 2025. With respect to cash flows during the three months end of January 31, 2025, we had roughly break-even operating cash flows. Cash flows during the more recent period were approximately $20 million better than our first quarter of fiscal 2025. The operating cash flow for the quarter includes close to $6 million in aggregate of cash payments for restructuring, costs including severance, CEO transition costs, and proxy solicitation costs.

至於我們的合併未開立應收帳款，我們在上個季度成功降低了此類營運資金投資，從截至 2024 年 10 月 31 日的 1.12 億美元減少到截至 2025 年 1 月 31 日的 8,600 萬美元。就截至 2025 年 1 月 31 日的三個月內的現金流而言，我們的營運現金流量大致平衡。最近一段時間的現金流比 2025 財年第一季高出約 2,000 萬美元。本季的營運現金流包括重組現金支付總額近 600 萬美元、遣散費等費用、執行長過渡費用和代理權徵集費用。

Now let me turn the call over to Daniel. Daniel?

現在讓我把電話轉給丹尼爾。丹尼爾？

Thanks, Mike. First, I want to underscore Ken's comments about organizational improvement. Simplifying the segment structure is a top priority. Our employees have embraced the clear lines of accountability that the new structure enabled. There's a direct connection between the S&S segments progress on margin margins and our operational improvements, 10%-plus reduction of segment staff and product rationalization.

謝謝，麥克。首先，我想強調肯關於組織改進的評論。簡化細分結構是當務之急。我們的員工已經接受了新結構所帶來的明確的責任劃分。S&S 部門的利潤率成長與我們的營運改善、部門員工減少 10% 以上以及產品合理化之間存在直接關聯。

Alongside these organizational changes, we've addressed policies and processes to ensure that purchasing and inventory management are well coordinated and subject to appropriate reviews. Our plan is having a positive effect. Regarding product rationalization, we are migrating customers to modern products and discontinuing products with negative or no gross margin. Those discontinued products represented less than 10% of S&S revenue over the trailing 12 months. The wind down of our steerable antenna business is also being finalized.

除了這些組織變革之外，我們還制定了政策和流程，以確保採購和庫存管理得到良好的協調並接受適當的審查。我們的計劃正在產生積極效果。關於產品合理化，我們正在將客戶遷移到現代產品，並停止生產毛利率為負或沒有毛利率的產品。這些停產的產品在過去 12 個月中佔 S&S 收入的不到 10%。我們的可控天線業務的逐步結束也正在最終確定。

A separate initiative underway in the S&S segment has been to adjust our go-to-market process. As a result, we have seen early success in negotiating more favorable contract terms, leading to better management of working capital in the future as we cycle out older contracts from backlog.

S&S 部門正在進行的另一項舉措是調整我們的市場進入流程。因此，我們在談判更有利的合約條款方面取得了早期成功，這將使我們能夠在未來更好地管理營運資金，因為我們可以從積壓的舊合約中循環出去。

We continue to monitor the ongoing stop work related to our next generation Troposcatter contract in support of the US Marine Corps. And while we do not have any material updates relative to our previous disclosures and SEC filings, we anticipate learning more in the near future.

我們將繼續監控與支援美國海軍陸戰隊的下一代對流層散射合約相關的正在進行的停止工作。雖然我們沒有任何與先前的揭露和美國證券交易委員會 (SEC) 文件相關的重大更新，但我們預計在不久的將來會了解更多資訊。

In closing, our S&S segment delivered meaningful top and bottom-line improvements in Q2. These improvements resulted directly from a shift in corporate culture and accountability that has reinvigorated the organization. I've seen tremendous efforts by our employees to take ownership of their projects and be accountable for performance at a local level. These operational improvements benefit not only our financial performance, but our customer satisfaction and confidence. We recognize there is more to do, and we'll continue to drive good decision making, cost reduction, and rationalization throughout the organization.

最後，我們的 S&S 部門在第二季度實現了有意義的營收和利潤成長。這些改進直接源自於企業文化和責任的轉變，從而為組織注入了新的活力。我看到我們的員工付出了巨大的努力，承擔起專案的責任，並對地方層級的績效負責。這些營運改善不僅有利於我們的財務業績，也有利於我們的客戶滿意度和信心。我們意識到還有很多工作要做，我們將繼續在整個組織內推動良好的決策、降低成本和合理化。

I'll now turn it over to Jeff to discuss our terrestrial and wireless segment. Jeff?

現在我將把話題交給傑夫來討論我們的地面和無線部分。傑夫？

Thanks, Daniel. Overall, our terrestrial and wireless performances met our expectations for Q2. Given that public safety and career technologies entail long sale cycles, large backlogs, and multi-year contracts comparisons of our T&W bookings can fluctuate from quarter to quarter.

謝謝，丹尼爾。整體而言，我們的地面和無線業績符合我們對第二季的預期。鑑於公共安全和職業技術需要較長的銷售週期、大量的積壓訂單以及多年的合同，我們的 T&W 訂單量可能會每個季度都有波動。

As a reminder, T&W has three divisions. First, CLT. This division focuses on wireless carrier's network solutions related to location, emergency notification, and messaging. CLT's 5G cloud-based location services are really gaining traction with global wireless carriers.

提醒一下，T&W 有三個部門。首先，CLT。該部門專注於與位置、緊急通知和訊息傳遞相關的無線營運商網路解決方案。CLT 的 5G 雲端定位服務確實越來越受到全球無線營運商的青睞。

Second, SST. This is our largest in terms of revenue. This serves as the core of next generation 911 networks. We currently support 11 states and multiple regions in the United States, with plans to expand to additional states and regions soon. Third, CST or Solacom, the fastest growing division, serves local dispatch centers with hosted and local applications for managing emergency responses.

第二，SST。這是我們最大的收入。這是下一代 911 網路的核心。我們目前支持美國 11 個州和多個地區，並計劃很快擴展到更多州和地區。第三，CST 或 Solacom 是成長最快的部門，為當地調度中心提供託管和本地應用程式來管理緊急應變。

In our SST division, we were recently notified of a next gen 911 related award. And in contract negotiations with the state in the southeastern part of the United States, an estimated to be worth north of $25 million over five years. With such a broad network of mission critical customers, we're developing a plan to leverage our nationwide scale to reduce significant network expenses by interconnecting various jurisdictions and offering new customers enhanced redundancy options to adjacent regions and data centers. Along with our development efforts, this focuses on bringing more core next gen 911 technologies in-house, reducing our reliance on third parties and improving our gross margins across existing and new customers.

在我們的 SST 部門，我們最近收到了有關下一代 911 相關獎項的通知。並且正在與美國東南部的州政府進行合約談判，預計五年合約價值將超過 2500 萬美元。憑藉如此廣泛的關鍵任務客戶網絡，我們正在製定一項計劃，利用我們的全國規模，透過連接各個司法管轄區並為新客戶提供鄰近地區和資料中心的增強冗餘選項來減少大量的網路開支。除了我們的開發工作之外，我們還致力於將更多核心的下一代 911 技術引入內部，減少對第三方的依賴，並提高現有和新客戶的毛利率。

In our CLT division, we booked one of a series of anticipated purchase orders with Vodafone, beginning in the United Kingdom. We are currently negotiating the statement of work, which will likely expand beyond this initial region, potentially adding 30 plus more with this global wireless carrier over time.

在我們的 CLT 部門，我們與沃達豐簽訂了一系列預期採購訂單之一，首先從英國開始。我們目前正在協商工作說明，該說明可能會擴展到這個初始區域之外，隨著時間的推移，可能會與這家全球無線營運商一起增加 30 多個區域。

This award directly relates to our new location-based solutions developed for our major US carriers, which we have focused on selling internationally. We expect other UK-based wireless carrier orders as they work to meet regulatorily regulatory requirements around location technologies.

該獎項與我們為美國主要營運商開發的新型基於位置的解決方案直接相關，我們專注於在國際上銷售這些解決方案。我們期待其他英國無線業者能夠下訂單，因為他們將努力滿足定位技術的監管要求。

In Q2, we also saw significant interest from major Canadian wireless carriers, which we're hopeful will translate into orders booked into the future. Our CLT division also recently secured a unique application using our location-based technologies to serve Polaris for continued support of their motorcycles and off-road vehicles. This award represents a five-year contract valued at approximately $8 million.

在第二季度，我們也看到加拿大主要無線營運商的濃厚興趣，我們希望這將轉化為未來的訂單。我們的 CLT 部門最近還獲得了一個獨特的應用程序，使用我們基於位置的技術為 Polaris 提供持續支援。該獎項代表一份為期五年、價值約 800 萬美元的合約。

As for CST Solacom, it continues to be our fastest growing segment. Our CST division is diligently developing our next generation secure cloud-based 911 call handling platform, which, when launched, is expected to grow our competitive position, not only in North America, but also globally for emergency response. As for other updates in CST, the US Navy support contract has been extended, and an entire eastern Canadian province has initiated a significant change order, and our partner in Australia, Telstra, has awarded us a substantial technology refresh order, all of which we believe bodes well for our call handling business.

至於 CST Solacom，它仍然是我們成長最快的部門。我們的 CST 部門正在努力開發下一代基於雲端的安全 911 呼叫處理平台，該平台推出後，預計將提升我們不僅在北美，而且在全球範圍內的緊急應變領域的競爭地位。至於 CST 的其他更新，美國海軍支援合約已經延長，整個加拿大東部省份已經啟動了一項重大變更單，我們在澳洲的合作夥伴 Telstra 已經授予我們一項重大技術更新訂單，我們相信所有這些都對我們的呼叫處理業務來說是個好兆頭。

With that, I'll turn it back to Ken for some final comments.

說完這些，我會把話題轉回給肯，請他發表一些最後的評論。

Thank you, Jeff. I want to close with a brief summary. The performance in the second quarter of '25 reflects the initial impact of our transformation plan. To recap, the elements of our transformation plan are, number one, earning the trust of all key stakeholders with transparency, accountability, and delivering on our promises; number two, improving operational discipline and reducing the cost structure; third, supporting the growth and development of successful high margin business initiatives; fourth, conducting a broad review of strategic alternatives; fifth, strengthening the capital structure; and finally, sixth, promoting a corporate culture that is centered on taking pride in our transformation, resulting in enhanced employee morale and productivity.

謝謝你，傑夫。最後我想做一個簡短的總結。25 年第二季的業績反映了我們轉型計畫的初步影響。總而言之，我們的轉型計劃的要素是：第一，以透明度、責任感和兌現承諾贏得所有主要利益相關者的信任；第二，改善營運紀律，降低成本結構；第三，支持成功的高利潤業務計劃的成長和發展；第四，廣泛審查戰略選擇；第五，加強資本結構；最後，第六，推廣以轉型為榮的企業文化，提高員工士氣和生產力。

We are delighted that we have already succeeded in strengthening the capital structure with the recently announced capital infusion, coupled with the amendments to the credit agreement. And we do believe this is a validation of the trust and confidence our lenders and creditors have in the merits and early results of our transformation plan.

我們很高興，透過最近宣布的注資以及信貸協議的修訂，我們已經成功地加強了資本結構。我們確實相信，這是對我們的貸方和債權人對我們的轉型計劃的優點和早期成果的信任和信心的驗證。

Operator, please open the call to questions.

接線員，請打開電話詢問。

(Operator Instructions) Greg Burns, Sidoti & Company.

（操作員指示）Greg Burns，Sidoti & Company。

Good afternoon. Can you just talk about maybe the progress you're making in terms of cost optimization in the satellite business? How far along are you in that process? Is it all reflected in this quarter's results? Or is there more to be gained in coming quarters?

午安.您能否談談衛星業務在成本優化方面的進展？您目前進展到哪一步了？這一切都反映在本季的業績上了嗎？或者未來幾季我們能獲得更多收益嗎？

I'm going to start, Greg, and then I'll turn it over to Daniel for some more specifics. So it's a continuous process. So we announced the transformation plan on January 13. Now there was some work that was taking place before that to start reducing the cost structure, but this is an ongoing process. And we are -- it's not just about reducing cost, it's about being more efficient in how we operate and being more targeted in the business that we choose to take on and what we choose not to take on.

格雷格，我先開始，然後我會把麥克風交給丹尼爾，讓他提供更多細節。所以這是一個連續的過程。所以我們在1月13日宣布了轉型計畫。在此之前，我們已經進行了一些工作來開始降低成本結構，但這是一個持續的過程。我們的目的不僅是降低成本，還在於提高營運效率，更有針對性地選擇我們願意承接的業務和不願意承接的業務。

Historically, this company has taken on very low margin, and frankly, in some cases, negative gross margin business. We need to be better at assessing what our cost is going into a job, pricing it appropriately, and taking it on. So it's not just about reducing cost. It's an element of it, but it's about running the business more efficiently and targeting business opportunities where we can justify appropriate gross margins.

從歷史上看，該公司承接的業務利潤率非常低，坦白說，在某些情況下，毛利率甚至為負。我們需要更好地評估一項工作的成本，合理定價，然後承擔它。所以這不僅僅是為了降低成本。這是其中的一個要素，但它是為了更有效地經營業務並瞄準可以證明適當毛利率的商業機會。

Daniel, you want to add anything to that?

丹尼爾，你還有什麼要補充的嗎？

Absolutely. So I think a couple of points worth mentioning here. First, as Ken mentioned, this process is ongoing and something that we'll continue to thoughtfully evaluate. I would say, certainly, many of the cost reduction efforts that have already been deployed were accomplished during our second quarter. And so there's a partial benefit that's reflected there for some of those. But the product rationalization process and the efforts to move into some higher margin areas are kind of a continuing ongoing effort. We are in the process today still of working through some of the committed backlog on existing products and existing contracts that we are, you know, have some additional time to perform under as well.

絕對地。所以我認為這裡有幾點值得一提。首先，正如肯所提到的，這個過程是持續進行的，我們將繼續認真評估。我想說的是，我們在第二季已經實施了許多成本削減措施。因此，對於其中一些人來說，這體現了部分好處。但產品合理化過程和進軍利潤率更高的領域的努力是一項持續不斷的努力。今天，我們仍在處理一些現有產品和現有合約的承諾積壓工作，您知道，我們還有一些額外的時間來履行這些工作。

Okay thanks and then maybe in terms of looking forward and targeting maybe some higher margin business. You announced that the $26 million order with L3 for A3M modems. Can you just maybe talk about some of these higher margin programs that you've been doing development work for over the last maybe a year or two that are now potentially going into production this year? What should we think of looking forward in terms of opportunities for growth in some of these areas where you've been doing development work?

好的，謝謝，那麼也許就展望未來而言，目標是一些利潤較高的業務。您宣布與 L3 簽訂了價值 2600 萬美元的 A3M 數據機訂單。您能否談談過去一兩年來您一直在開發的一些利潤率較高的項目，這些項目今年可能會投入生產？在您一直從事開發工作的這些領域中，我們應該如何看待未來的成長機會？

Again, I'll start, and Daniel can add if he likes. So we're not going to comment on gross margins on any particular job. I assume you can appreciate that. But the company's aggregate gross margins have been weighted down by -- in the incorporation of, frankly, inappropriate jobs. And we are going to be more selective.

再一次，我先開始，如果 Daniel 願意的話可以加。因此，我們不會對任何特定工作的毛利率發表評論。我想你會理解這一點。但坦白說，由於納入了不合適的工作，該公司的總毛利率受到了拖累。我們將會更有選擇性。

So when you see our gross margin going forward, we are hoping that it will improve partly as a result of improved product mix. We are deliberately not going to accept jobs going forward as the company's done in the past that are very low thin or even negative gross margins. So that in and of itself is going to improve the mix.

因此，當您看到我們的毛利率未來有所提高時，我們希望它會因產品組合的改善而提高。我們不會像公司過去那樣，故意接受那些毛利率很低甚至為負的項目。因此這本身就會改善混合。

The other thing I'll add to that is we are going to do a better job of leveraging our differentiated and proprietary technologies and providing improved service to our customers that enable us to solve our customer problems better and where we can deserve better gross margins than what the company charged for similar programs in the past. But as we provide a better, more differentiated solution, we do deserve improved gross margins.

我要補充的另一件事是，我們將更好地利用我們的差異化和專有技術，為我們的客戶提供更好的服務，使我們能夠更好地解決客戶問題，並且我們可以獲得比公司過去對類似項目收取的更高的毛利率。但隨著我們提供更好、更具差異化的解決方案，我們確實應該提高毛利率。

Daniel, if you want to add to that.

丹尼爾，如果你想補充這一點。

Can I -- I think I agree with those points. On A3M specifically, certainly, we're very pleased to see a program that we've worked through the development phase over the past several years, beginning to transition into production contract awards. I think it reflects the continued level of confidence from both our end users within the US DOD and other partners, as well as with our direct customer and L3Harris. We're continuing to focus on delivering differentiated capabilities that offer meaningful understandable customer value that allows us to capture meaningful margins.

我可以——我想我同意這些觀點。具體來說，就 A3M 而言，我們非常高興地看到我們在過去幾年中已經完成開發階段的專案開始過渡到生產合約授予。我認為這反映了美國國防部和其他合作夥伴的最終用戶以及我們的直接客戶和 L3Harris 的持續信心。我們將繼續專注於提供差異化的能力，提供有意義的、可理解的客戶價值，使我們能夠獲得有意義的利潤。

Okay, and then just lastly, on the cash flow and you're working through some of your own build receivables. What do you think -- or what is your outlook for the cash flow in the second half of the year? Do you expect to be cash flow positive?

好的，最後，關於現金流，您正在處理一些自己的應收帳款。您認為—或者您對下半年的現金流有何展望？您預計現金流為正嗎？

We're not giving the projections. But Mike, maybe you can give them some color on that.

我們不提供預測。但是麥克，也許你可以跟他們講講這個。

Yeah, I was just going to say we're probably not going to give any specific guidance on that, Greg. But in terms of our trajectory on the unbilled, we are working through, as you can see, each quarter chipping away at the growth we had experienced last year. I think that coupled with our cost reduction initiatives, a focus on being mindful of our CapEx requirements. We are certainly having a view that we're trying to improve our cash position with profitable business going forward. So our expectation is we'll continue to do better, but we still have some more work to do.

是的，我只是想說，我們可能不會就此給出任何具體的指導，格雷格。但就未開票業務的軌跡而言，正如您所見，我們正在努力，每個季度都在削減去年所經歷的成長。我認為，除了我們的成本削減措施之外，我們還應關注資本支出要求。我們當然認為，我們正在努力透過未來獲利的業務來改善我們的現金狀況。因此，我們的期望是繼續做得更好，但我們仍有一些工作要做。

All right. Thank you.

好的。謝謝。

(Operator Instructions) Griffin Boss, B. Riley Securities.

（操作員指示） Griffin Boss，B. Riley Securities。

Hi, good afternoon. Thanks for taking my questions. I'd like to drill down into some of the questions Greg just asked there with maybe a little bit more pointed question. I'm curious just with the deliberate decision to not accept low margin, bookings or business, which I appreciate. Is there any color you can provide in terms of what you believe could be a sustainable margin profile for space and satellite and T&W in general, not thinking into specific programs on a go-forward basis, assuming this S&S gets back to normal operations post restructuring, that historically was maybe a 10% EBITDA business, T&W maybe 20% just generalizing? Perhaps any more color on kind of a go-forward basis with these new bookings profile that you're targeting.

嗨，下午好。感謝您回答我的問題。我想深入探討格雷格剛才提出的一些問題，也許這些問題更尖銳一些。我很好奇，只是故意決定不接受低利潤、預訂或業務，對此我表示讚賞。您能否提供一些信息，說明您認為太空和衛星以及 T&W 總體上可持續的利潤狀況，不考慮未來的具體項目，假設 S&S 在重組後恢復正常運營，歷史上它的 EBITDA 業務可能是 10%，T&W 可能為 20%，這只是概括？也許對於您所針對的這些新預訂資料的前進基礎，還有更多的細節。

We're not giving guidance. So we do aim to improve the gross margins through better cost discipline, better product mix, and improved product positioning that enable us to justify better gross margins by delivering better value to our customers. We're not in a position to give you specific numbers on what that gross margin is at this time.

我們沒有提供指導。因此，我們確實旨在透過更好的成本控制、更好的產品組合和改進的產品定位來提高毛利率，這使我們能夠透過向客戶提供更好的價值來證明更好的毛利率。目前我們無法向您提供毛利率的具體數字。

Okay, understood. So just shifting gear, related to the unfavorable ruling after what I believe was the fifth protest by the incumbent on GFSR. I appreciate this news occurred today. But just curious, is there anything Comtech can do to re-protest this yourselves? And even if so, if there is something you could do related to GFSR, is that something that you even want to spend time on at this time given the low margin profile of that contract?

好的，明白了。因此，我只是換個話題，這與不利的裁決有關，我相信這是 GFSR 現任者第五次提出抗議後做出的裁決。我很感激今天發生的這個新聞。但只是好奇，Comtech 自己能做些什麼來再次抗議這件事嗎？即使如此，如果您可以做一些與 GFSR 相關的事情，考慮到該合約的低利潤率，您是否願意在此時花時間做這件事？

Good question, and we are considering it. As you know that we were alerted today of the GEO's decision. We are going to consider our options in light of their decision on the protest. There is room for us to respond, but as you also observed that the margin is very low there as well. So we are considering our options.

好問題，我們正在考慮。如你所知，我們今天收到了 GEO 決定的通知。我們將根據他們對抗議的決定來考慮我們的選擇。我們還有回應的空間，但正如您所觀察到的，那裡的利潤率也很低。所以我們正在考慮我們的選擇。

Daniel, do you want to provide any further color on that?

丹尼爾，你想對此提供進一步的說明嗎？

I think I agree with the summary. It's relatively fresh news at this point. There are a number of options available to us that we're in the process of evaluating and assessing at this point.

我想我同意這個總結。目前這還是一個比較新鮮的消息。目前，我們正在對多種可選方案進行評估。

Okay, fair enough, thanks for that. And then maybe one more if I could just more broadly on TNW, maybe for Ken or for Jeff. Just curious if you had any commentary around -- the FCC released their kind of meeting agenda for their meeting later in March. And it really highlighted their commitment to ensure NG911 resilience and accessibility. Just curious if there was anything on that front that maybe you wanted to comment on? Or anything in that that surprised you or improves your confidence in that part of the business going forward?

好的，夠公平，謝謝你。然後，如果我可以更廣泛地談論 TNW，也許可以為 Ken 或 Jeff 再提一個問題。只是好奇您是否有任何評論——FCC 發布了他們 3 月下旬會議的議程。這確實凸顯了他們確保 NG911 彈性和可訪問性的承諾。我只是好奇您是否想對此方面做出任何評論？或者其中有什麼事情讓您感到驚訝或增強了您對未來該部分業務發展的信心？

Jeff, you want to take that question?

傑夫，你想回答這個問題嗎？

Sure. Yeah, Griffin, thank you for the question. Yeah, we were anticipating the FCC's agenda coming out. There's really two key things that are exciting for us. One, there's a focus on location accuracy. And since we are the key supplier to wireless carriers for location accuracy, it really helps our business and gives us some opportunity there within the carriers themselves. They specifically call it the Z axis, which is the floor someone's on when they dial emergency, so that's also something we do and offer to wireless cares.

當然。是的，格里芬，謝謝你的提問。是的，我們期待聯邦通訊委員會的議程的出台。確實有兩件關鍵的事情令我們興奮。首先，注重位置準確性。由於我們是無線營運商定位精度的主要供應商，這確實對我們的業務有幫助，也為我們在營運商內部提供了一些機會。他們特別稱之為 Z 軸，這是人們撥打緊急電話時所在的樓層，所以這也是我們為無線護理人員所做的事情和提供的服務。

But the second part to your point is they also talked about next gen 911 resiliency in the agenda. And it's kind of what I talked about in my prepared comments is as we interconnect the networks, adding additional resiliency to the network, is something we're looking at doing. And the FCC is just kind of enhancing that mandate and looking for. vendors to comment on. So we will be preparing some replies and comments for them and some recommendations along that. But we're already kind of doing that and anticipated their move there. But both, we thought were very favorable for our business at T&W.

但您觀點的第二部分是，他們還在議程中討論了下一代 911 彈性。這是我在準備好的評論中談到的，當我們互連網路時，為網路增加額外的彈性是我們正在考慮做的事情。而聯邦通訊委員會只是在加強這項授權並尋求。供應商發表評論。因此，我們將為他們準備一些答案和評論以及一些建議。但我們已經開始這麼做了，並且預料到了他們的舉動。但我們認為這兩者都對 T&W 的業務非常有利。

Great, thanks for that color, Jeff. And thanks everyone for taking my questions. Appreciate it.

太好了，謝謝你的顏色，傑夫。感謝大家回答我的問題。非常感謝。

It appears that we have no further questions at this time. I will turn the program back over to Mr. Ken Traub for any additional or closing remarks.

目前看來我們沒有其他問題。我將把節目交還給肯·特勞布先生，請他發表任何補充或結束語。

Thank you, operator. For those of you who are attending the SATSHOW in DC this week, we hope you find a chance to stop by our booth and meet some of the contact team members. We really look forward to speaking with you all on our next earnings call for fiscal Q3. Thank you all very much and have a good evening.

謝謝您，接線生。對於本週參加華盛頓特區 SATSHOW 的各位，我們希望您有機會在我們的展位停留並與一些聯繫團隊成員見面。我們非常期待在下次第三季財報電話會議上與大家交談。非常感謝大家，祝大家晚上愉快。

Thank you. This concludes today's program. Thank you for your participation. You may disconnect at any time.

謝謝。今天的節目到此結束。感謝您的參與。您可以隨時斷開連線。