Comtech Telecommunications (CMTL) 7 Dec 172018 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Comtech Telecommunications Corp.’s First Quarter Fiscal 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded on Thursday, December 7, 2017. to conference like to now would turn over the Ms. I of Comtech Ceriello Telecommunications. Maria ma’am. Please go ahead,

Thank morning. of President Senior and morning President call With you, of good Officer. on and are for Corp. Comtech us Michael Executive the Chief conference Fred Telecommunications Comtech; Kornberg, Financial first Officer call and Vice quarter the fiscal Chief XXXX. Welcome year this to and the Porcelain, D.

performance, involve and information company’s outlook the entirety proceed, in I could management. remind information. Safe company’s future and in Commission in the are need The regarding will condition I business Comtech, Harbor the certain Actual but this assumptions presented business the of filings. Officer company’s company’s Exchange are business the materially objectives, plans, of financial qualified of company’s to significant Any include, Fred? to from and Certain outlook, we call outlook; Before information limited you language. performance to be and and and results Fred plans, forward-looking now the company, of and such contained the to in and uncertainties. Chief forward-looking cautionary not statements Executive pleased the such statements President relating differ and Kornberg. nature introduce Securities plans forward-looking by am risks their objectives,

this call. good and Maria morning, everyone, us and you, on for Thank you thank joining

million revenues $X.X an we of reported operating adjusted yesterday afternoon, quarter $X.X of million As first and million. and announced results $XXX.X profit of our in EBITDA

EBITDA million $XX million to range target range million. of of and $XX XXXX million to we Additionally, fiscal a reconfirmed increased adjusted our to our $XXX guidance revenue $XXX

many and with $XXX.X received finished large our a quarter of we the Order first achieved products a for number flow the awards of million. consolidated of During very of and was $XXX.X bookings strong million. contract quarter, strategic we backlog

but current strong I business optimistic future with momentum and is exceeded why to very to and so first results like you Our in CFO, updated fiscal XXXX tell in discussion I financial beginning answers. over and a it and our our really bit, year. results it am looks fiscal I’ll questions me first will opening Mike provide expectations more will our Mike? our quarter a XXXX who come a our first it of Then, let up our about detail. back before turn pleased to I’m quarter guidance like look Porcelain,

generated of end from from morning, customers Consolidated sales XX.X% approximately good were U.S. and which $XXX.X Fred everyone. from customers, net government customers. commercial end million and Thanks, QX XX.X% domestic XX.X% for were end international

both to achieved strong product bookings our which our in segment approximately excess achieved and ratio $XX.X were order book-to-bill decline lines. segment $XXX.X this in last due The sales. across ratio many timing. segments is segment to approximately million. consolidated as of QX, of During X.XX We million represented Net compared of book-to-bill flow a XX.X% of one-time total of million sells. Commercial a slight in in achieved we in the with were net sales Solutions of $XX.X primarily Sales QX year, sales

products. Most from our station our as as product conditions a for entire segment terrific be they great market of and sequentially On market of Solutions satellite good, XXXX, HEIGHTS not fiscal overall notably in we solutions QX end bookings. for well bookings, it X.XX. customer This Bookings Commercial customers, our segment, customers to for seeing U.S. line higher book-to-bill are of from normally Solutions only ratio that than was but significantly achieved a base. was validation than were continue Commercial We QX. of our interest strengthening these strong quarter higher quarter also our products our believe new a increased Government were a commercial across a earth quarter basis

technology of timing. and quarter solutions, safety this enterprise our down result to solutions security Turning and technology our the were mostly sales slightly

discuss quarter. Fred awarded almost contracts for will were of in detail, million more these products $XXX strategic we As this

Now about $XX.X XX.X%. of our sales products segment, in approximately sales represents of to sales represented where net total contract fiscal let me of primarily QX due talk as were million, a compared Government was decrease period $XX.X net timing. This to significantly Solutions approximately in XX.X% million over-the-horizon segment over of decline XXXX. the reflects expected period microwave sales. and The in lower Sales

book-to-bill of large supporting bidding activity the commodity we shift ratio on and order in absence in X.X achieved the was for trend for validates exceeded of program. This X.XX earned book-to-bill of in segment we U.S. this away the the in tactical and the initiated. BFT licensing strong segment our fees quarter. quarter XXXX, the contracts BFT that Government million this decline Army’s that sales, believe Solutions row expected and strategy strategy Despite the our $X.X of fiscal segment ratio Our third quarter from a a we this in first property intellectual was

quite recent our is In are optimistic highest and back an bookings accomplishment backlog even higher the for Government TCS it of go has on February most XXXX. fact, our acquisition XX, our This that and the if we includes than segment been backlog outlook since a only few quarter amount business for can is income fiscal chasing. our and the of predict opportunities to to moment, able timing, of a nominal opportunities. operating are these secure XXXX At we assumptions given from we revenue difficulty were the

you Now some let give color metrics. operating on our me

consolidated XXXX sales profit compared fiscal a XX.X% net fiscal XX.X% as to XXXX. of in in QX of of QX percentage was as Our gross

of expect mix, consolidated the we expected XXXX. product the the absence overall lower Given than currently for fees be XX.X% changes achieved profit of in $X.X million and year, gross we to BFT-X slightly fiscal IP

or fiscal expense XX.X% operating of of consolidated were the expenses $XX.X XXXX QX On net million side, sales. SG&A in

fiscal growth our expenses SG&A of achieved million currently or expect net the amortization related expenses half percentage XXXX. For $X.X the as and and in development in of XX.X% $XX.X current solution we spending of to the stock-based spending assumptions, year, to Research and solution $XX.X segment and be a and of million in XXXX for given fiscal commercial the of XX.X% of spending revenue revenue government million second consolidated plans were we the compensation. constituting to almost comprised XXXX segment sales was comparable rest with QX

invest significantly new to our across line. entire technologies continued We product in

to the year, XXXX a as did Total $XXX,XXX fiscal XXXX. million XXXX. related the we is in performance R&D is first For previously of shares compared in of what revenues, expect be similar quarter for to we same the approximate decrease primarily what stock-based quarter XX% were earned. for of $X.X as fiscal QX. the to is fiscal it expense would Otherwise that due was to we This for expected quarter, reversal stock-based compensation of to $XXX,XXX million the currently to about have which which the certain expense of been expect compensation

$X.X the consolidated For be given the type million of of that issued will believe Amortization be than fiscal that expense run year, stock-based expected three higher and compensation quarters. of and basis, fiscal QX in operating XXXX in year, the the awards remain XXXX. million we a in of X.X% recorded this in fiscal $X.X QX was On net fiscal XXXX. to the GAAP outstanding $XXX,XXX amortization intangibles expect we income are during our next total or currently awards XXXX, of to rate the of was sales for same

each compares of operating of on a achieve we’re amortization targeting QX year. expense fiscal see which of and operating fiscal we adjusted to and our fiscal income. the GAAP second filed important X% percentage million we regard, expect QX X.X% in else and to of of net net of continued range EBITDA XXXX, favorable the as at amount This consolidated million Solutions to $XX.X was Adjusted gap XXXX the a For Solutions third is range X.X% sales of investments consolidated believe in quarters our excludes an metric Government X%. income XX-K the of fourth XXXX million of or total expect with of sales in adjusted the our $X.X consolidated quarter of this in EBITDA segment EBITDA in that year, net loss in in described in everything or XX.X% achieving Form our $XXX,XXX sales. the and moment, $XX.X sales. related of sales XXXX net was we last was X.X% Based GAAP or in to related segment operating our We fiscal Commercial

$X.X million Based R&D was that be efforts segment far QX quarter, over-the-horizon adjusted our sales microware the quarter BFT adjusted and spending, for contributions that GAAP as we licensing flow order will We quarter fourth in in income, related and of and IP improving slightly Government this net in adjusted EBITDA. impacted operating EBITDA less by income consolidated GAAP longer dollars products QX investments well as earn. peak by will low sales, This EBITDA on marketing Solutions than expect of from fiscal income no operating of before be and in absence currently QX. QX our the the significantly and XXXX in level and segment expected fees net of the

reflects quarter sheet. talk interest and million about of our Let was now balance credit first expense facility. and our the taxes, XXXX Interest expense interest $X.X me primarily secured our on for fiscal

is to reflect the cost XXXX expense or of in the borrowing financing X.X%. deferred of expected fiscal amortization rate, interest rate total actual approximates excludes which Our X.X% case currently

currently tax XXXX the XX.X%. side, approximate company On discrete excluding the income effective expects to items fiscal tax its rate

our not really the political and reform all of it Presidential estimate will will it day, to is Our which are you, made, currently for debated of analyze Internal Comtech we quarter amongst At Revenue Congress. does our and Code, back impact Administration expectations. of the of any which surpassed the U.S. on and hope rate the members we effective rate good include tax and was impact a be guidance. Once our being its original decisions the potential the report tax positive end

of On was press EBITDA share was defined as and at in the XXXX adjusted of a bottom-line of QX EPS release GAAP million. our loss the per diluted fiscal end $X.XX $X.X

million balance million and indebtedness cash and activities our XXXX of in equivalents XXXX, and we $XX.X operating by of October the from $X.X flow total of had quarter. million QX side, approximately we reduced cash this we generated cash On sheet on fiscal $X.X XX,

amortized financing cost of XXXX, excluding had we XX, debt million. $XXX.X As for October total of on

was October of ratio leverage as X.X times EBITDA. XXXX, XX, maximum compared As to a our X.XX, of allowable

flexibility So, we the pretty good balance moment. have at sheet a

future. in our fiscal foreseeable Given we compliance XXXX, facility credit anticipate with for our being the

of QX in it on likely down we QX, majority and Board QX flow cash QX. With credit Given fiscal EBITDA on business is adjusted to approval, of facility. January of should February generated XXXX declared with XXXX. of our the QX as XX, QX our of slightly expect planning our second same quarter be with on compliance and to to board levels our close fiscal record in at are $X.XX a share the as dividend for remain this financial for the QX flow payable under Directors being EBITDA dividends as adjusted per of mind, be covenants to the shareholders growth you in subject cash XX, for secured Future from common XXXX well XXXX our

me our turn will further discuss detail. Fred, in who Fred? let back Now to it business

Mike. Thanks

of what you Let color give each segments. happening is in me our some on Comtech

large which segment, growing me let Solutions First, Commercial is markets. several focused our on discuss

Here up-and-down amplifiers. we frequency and satellite satellite such converters excuse provider networks as are communications me solid-state products modems, traveling tube -- and leading and a wave of

as location-based We’re trusted such as of systems safety leading Generation also such messaging technologies. Next provider networks; a applications and enterprise X-X-X public

channel Our network the satellite-based the area, in back participate and SCPC, our communication leader products haul most per ability proven satellite or continue satellite modems. to primarily we undisputed to by driven deliver the single In carrier and bandwidth-efficient market. the in modem services be

past customer important but This MEO several forbidding throughput is opportunities. our past fixed systems, larger intended satellite Our two for high and what call traditional and been The the use geo-satellite is few meet market. developing us, new SCPC customer satellites. solution we have be has and an much date, positive. those new but which and been advantages LEO To than considering HEIGHTS continues migrating we a our marketing for wins for the market systems. entirely to have also this growing pipeline not has high traditional strategy with uses demands of Height system only in years distinct the one reaction quarters, network systems sales to and throughput line new product for Heights to In of we the satellite is announced provide solution focused on

fiscal for that believe HEIGHTS be year a breakout also orders. XXXX will We

be to In-Flight excuse the is continue we based market. the connectivity or area me, Another IFEC about excited market satellite

provide area will revenue enable Our contributor to is This power help and services year a amplifiers in us and solid-state also passengers. for commercial believe this market their growing In-Flight airlines be Comtech to for a beyond. significant fiscal we connectivity XXXX

we state the GaN million As quarter continued our order a recently communication expansion first also announced hope the and satellite GoGo awards solid you announce amplifier more announced know for $X.X amplifiers We're line. in follow from solid-state receipt amplifiers product the a a high-powered seeing and we to soon. strength for power of of

power for and compact transportable consumption rugged the mobile new significantly GaN them where know, and matters. applications, efficient amplifiers are size As and ideal more you making

XXX public next solutions the generation for local over internet XXX wireless, operations. routing and routing side, call include for On XXX public for solutions networks, our voice safety state safety

in build Indiana we While ESI the systems Washington. also Tennessee, next next we California, Florida. continue state to the and net We're new to out area, the continue generation to of generation deploy for roll this opportunities continuing in deployment multi-year

call of net political NGXXX We emergency IP Mike quarter, continue be in current were security with solutions, contracts believe enhanced this safety of handling solutions. wireless and initial awarded service ESI a years facilitating value that mentioned $XX.X as multi-year EXXX, funding an to including number provide aggregate many and for past and technology strategic that will $XX for Next million the a will and grow or technology we the and ahead of network These market large million. such solutions Generation During growth. enterprise of solutions from public helpful environment safety variety contracts an ATT,

users which trusted provide various get find, to interest. location solutions Verizon's enterprise product for of points Turning we Services, it for to to here and software, which locate line, makes and include Navigator our our solution GPS-enabled easier directions

application most our location-based awarded $X.X During Fortune for recent from million we quarter, a an customer. key were contract award XXX

messaging others We and such service text for years. also offer providing Verizon solutions, many to

or centers, As service this that our end we and government the gateways, high-performance talk critical short technologies Solutions part text markets require messaging our SMS platforms offer messaging we about serve operating-grade for platforms. intelligent At point, solutions, carrier-grade of in segment, Government and wireless routing users me messaging and systems. mission messaging government feature-rich cloud let where large

control, Government and surveillance, are agencies Our sold of to Department of Solutions the solutions. Defense or and consist primarily U.S. and computers, intelligence, international command, agencies reconnaissance CXISR communications, government

Solutions satellite million enhanced include sight KU the infrastructure and for Marine scatter management Funding A of contribute and of RF at technologies. $XX.X million and net U.S. an are Recent our Central surfaces communications space and contract million contract BFT $XX.X tropospheric provide a $XX.X Corp. awards ground satellite in solutions A sustainment the contract U.S. to modification expected a international and continue support Our terminals, to scatter, the modification area forces technology satellite, responsibility. $X.X switching Command provide of transceivers. to million contract bandwidth aviation five-year BFT-X bandwidth, for XXXX contract and outsourced tropospheric fiscal in for valued $X.X line for that of million services agency. order information Government segment from sale to include sales, power to

position BFT-X a the as believe program two-way on for be also a more excuse million us considered $X.X for to be present the transceivers. We back step for transceivers BFT-X from is port in BFT-X – Comtech’s received BFT competition. to I a separate – contract This supply me well form BFT to to largely office,

program. U.S. South We contract critical supply major the $X.X components contract $X.X test a a of source troposcatter throughout activities million support NASA of to million to Peninsula funding equipment the to also Army initial received with support the Korea space space contractor U.S. and a and in to related

We’re customers XXXX, are to fiscal commercial in of sales U.S. also station and networks products. And noticeably compared earth seeing believe improve for as increased U.S. interest will XXXX. Government products our fiscal commercial there to the satellite from Government

or For earth to we example, supplied for recent military airborne this the request expecting a U.S. and are million quarter, five-year tube Systems $X.X its contract $XX million follow-on other IDIQ station, quantity amplifiers Space Warfare competitor which Naval the intention forward satellite publicly satellite we announced a and fiscal most delivery model and to integrator We receive during we're us to high-power excuse Navy's receive to programs, traveling in fiscal to strategic received from me, the wave contract so Comtech expecting no XXXX. IDIQ Government contract a procure from indefinite contract looking U.S. -- SLM-XXXXB Command, modems. so the our responded show believe indefinite to to

pending referred multi-year Our existing potential future U.S. that sustainment SNAP a communication proposals AN/TSC-XXX pipeline to provide systems as opportunities commonly are of and on large family also the that several includes contracts, we terminals. including of retrofit to Army's renewal services of

the In and RFP to dollar AN/TRC-XXX an addition and supply for the we very expected terminals to troposcatter preparing old multimillion program, hundreds equipment replace of large to inventory. SNAP respond of government multi-year tropospheric to are communications

fiscal third a final a program, for proposal vendors that request we proposal draft issued on prospective and recently – circulated XXXX. has be will believe to sometime RFP in been Just

or As to we we've this although revenue time, fiscal revenue contribution in would perhaps future for of fiscal our years. bookings, subsequent for even make affect you award know, waiting this been an it expect would not likely program XXXX long to opportunity significant a XXXX

platform agencies Government and have to know, for over to and horizon of commercial the a you As supplier years. been oil off-shore many U.S. international customers we systems troposcatter

other systems at of throughputs and second. microwave megabits XX systems large over-the-horizon per broadband and of transmit our video a applications have over We can installed base worldwide

We discussions related also continued negotiations to to be international several involved and large in opportunities.

are contract if, all not matter of in positive these all, it but to opportunities difficult for our for broad and growth usually future awards of when. shows, predict, a we as history to across very is However, see me, signs all continue opportunities but businesses. Excuse

Let me and question-and-answer proceed conclude results conference to call to Operator? our call. the now conference pleased this I of first our like I'm with would by part saying, quarter

our Market. And with Jordan Noble we’ll first take question Capital Instructions] ahead. from [Operator Please go Mark

Good morning, gentlemen.

timeframe which significant that the line at what out? look on a kind First, NextGen be a that business Are $XX XXXX X-X-X. basis? is to an you of you from $XX something on and million million couple specific contracts step that like of – basis business. be revenues the the out could on just say years received question what AT&T or Obviously, of XXXX I’d size to by of worth of annualized business ongoing a could an looking annual at block

say, to I of Mark, us timing be will question to to respond awards it to systems your way local lot a difficult best that think of type is state and expect agency over revenue it some contracts higher be we is It's the straight today. predict these recognized and the the than be to hosted what us real will line. new of for awards these a for

put them, until specific a we are but So, than today. summary, announced where we awards tough to are the on higher it's number be win in it year, a hope and we to just

And you the into do position are October $X.X million into that Okay. in was marketplace dominant for competition that this contract think year? that? of going Korea, of got, competition for signals which in sort kind you large any there The deployment effective tropo you

contract. sole part was is, the a first it of question, The Mark source

it position, not to large have Second better matter. be tropo have the we do puts the really and doesn’t as can products part but you certainly bid for U.S. major many, competition or you whether nobody – is, position. think will that done. it But in is, a a our we and working know in program really any see other that many have let's expect program our a obviously, our government competition position of government on for the area, Anybody there us good can very contract say that that's – say years the with now, and replicate I puts I they can't some can’t in large the think us very, seem what then

business was the Revenues in final quarter? A upside what your know in consensus fiscal your and first incremental percent above in million quarter the as not came about above for was Okay. plan [$XX][ph] question you third from [$XX] Street What or percent that [ph] quarter expectations. that actually you was of of me. upside and in business million that pulled second said

a Mark. little bit That’s both. a question, of good It’s

demand You this better expecting you know we quarter. was saw than what plan, definitely original our business know

of some not definitely our there QX a on it So, I’ll incremental a I to point, some prudent but pull-ins. predicting demand that approach, demand. did some our you our pull-ins increasing this of put things we’re taken see know of we’re into – seeing slip is year. revenue into we’re just and that new were we’ve We in it, there next reflect incremental QX some from a expecting the cycle At contracts kind specific mean, guidance, the and dollar still QX and of always QX, call could QX, not difficulty because the that’s

demand, are pull-ins, it. you you moment, is and but about you now we an pretty were we good seeing are right we where some increased that know, So, know feel these at know of the this feel we

you Thank very much. Okay.

And our go next we’ll take Please question Citi. Kovler ahead. Stanley with from

defense surveillance on new and is pick-up us Kehoe My you spending. in actually gets projects help you’re as Kovler. remind expecting This programs? a budget for Stan growing once exposed the And Hi. Josh When how to government can is areas of on on you’re passed? the question government, spending

the parties and really and are think to two budget I that happen that concerned is think will we what is predict. as know all when position far hard at the as I government the

the that record about a the the just been as programs already. the has those the talking large Even have As far that instance that of and tropo and we've for that I've talking BFT program that funding programs is think funding about, enumerated already. one I

we we compete So, are funded. a number large we and that in that our – already today of programs follow probably

follow in Thanks. business impact initial reform. guidance up any tax from have know said and taken you reflect impact? terms steps maybe to are the you implications. what on And doesn’t your effect try And another of anticipating the we reform I proposed Okay. your on quantify potential and any But

But We've at proposals. change day. looked certainly every their they

So, like rate if There of impact. some creating based credit positive every do a produce goes meaningful But what's away, for domestic been tax down so we'd U.S. be us. Excel day things since the spreadsheets corporations that on be goes in are U.S. reported. tax kind go we a and it and the impact certainly, that the would forth, that and to piece. production And lose away will we��d be that

that that we're on So, overall they they on would tough out ultimately based but in there two be it’s say in put know what us will out it there, that to pass I what a to it specifics going real adopted. number like to and pass they're dress you seeing to positive until are us year it's put looks it, the the

it’s All me. Thanks. right. That for

Northland our Mike from question Latimore go Capital. we’ll Please ahead. next And with take

Yeah. Thanks lot. a Great.

area? On in revenue you sort the opportunity what opportunity, of SNAP the the is SNAP see opportunities, booking potential

The the SNAP program, program. are we incumbent you on that as know,

the because the but $XXX We million. in of number know I it have a program program, in not evaluation, would is bid excess rather is today you specify

you in there, then the quarter, kind some of large I believe what renewal with And that, did Great. X-X-X your there's business know with up-sell in incremental you get on conjunction Okay. that renewal? also

Can that? you I'm repeat sorry.

and a X you know Yeah. curious some what also believe of a was in I kind providing? you renewal Tier the up-sell, carrier quarter you're with had have services you just I big then additional

AT&T For programs… the

Yeah.

a net vary We're the they spread a it's wireless contract so and a multi-year. it's programs multi-year well, -- a small five-year That of the multi-year kind contract they’re of location and is we different ESI basically, whether over different the amount of as two-year business programs, from number services. or There or to do. providing

spread So, around. it's of kind

And be initial when on that? it. Got any might just the BFT-X there RFP last opportunity, of sense around then an

No.

it our be will even BFt-X don’t of really will – XXXX. terms in happen fiscal anything quite it think expect till be let's I time, say to some I

However, there waveform, of we BFT-X we fulfilled. being are a is have that BFT-X, And small works And for also transceivers. contract for demonstrated porting that, which program. an more fully there for We're requirements have which opportunity that in our we doing are contract. not got our fact, XXX

can before further testing So laboratories actually field to the actually some some on do or in out that the the government and in more they it put decide buy transceivers.

Okay. Thank you.

And take go Ladenburg. our Mattson next question Please from with Glenn we’ll ahead.

Hi, good morning.

could the theater the maybe in come have in product on of – On theory in perhaps Korea. the government the to an phase order that become active and the the that give potentially – you a It's they orders some maybe the in a that does congrats order winning of the up for interesting that that conference next that speak theater, product they leg tropo rushed it seems rushed in through through?

so. think certainly we Well,

And those? tropo, or about those all at if other status opportunities on government along in moved the what right. foreign All the what's

Yeah.

think some been have years operating very before. than we've that know, some the you large for I in international the As we the – think opportunities but some time market had countries state small right more customers, and ever pipeline quite with can we've more customers I with very now throughout we

they you Do be I on year on to question reordering. I built as had the up you go, know up that's – I in-flight a XXXX there. also connectivity, a then to nice the, they for – XXXX to in a the space ramping major follow-on think year-over-year And for Thanks. they're aircraft. all me expect Okay. now go to you was had It happened fiscal inventory think order and see guess last that last was get way. maybe in to I versus that's, deployed guess the category? big a some

this point from we XXXX on to continue more orders be of I really No, to flat nature. through think XXXX and see a the

it me. Okay. for Great. Thanks. That's

George next And Notter ahead. take Please our we'll with go from Jefferies. question

Thanks a EBITDA in are I little and expectations we movement know know Kyle away bottom BFT George. the rare guys. in highest that. is, call you acquisition. the you from bottom out, QX, And the do we coming the XX-Q as recover. I Government Hi, about for backlog margins is business but government on the also a lot. you for question you and where's the I how like Government revenue bit wanted talked on low is This guess the contracts have they to you business. for the through is know I when at your that mentioned talk transition about margin guess -- since you it TCS to Solutions your bit license the put a Solutions

where of forward how going trajectory is talk the to So, wondering just business reconcile, that – margins of what bottom if that Solution Government the could please? in is the and to you

Sure Kyle.

profile worse is of what’s of quarter. in was to to the QX terms of to our would you So, know It's sort ship. similar the QX the in QX say revenue say bottom whether but I maybe in likely have terms even slightly going going tough that be and the we

the included So, with that property did when but backlog backlog. shipping of to just you we in in And that’s good the margins same we segment – where BFT-X that expected in hope point know EBITDA for we about to did is be start in year, will X% to said, kind the our in last margin We QX. slightly live. the got lower intellectual than we you segment X% fee. EBITDA But adjusted the And QX heavy XX-Q adjusted that’s the some QX. what or

just take done and So, and in very have expecting you broad BFT-X we’re points the at back margins by that step year if segment, year the fee. a done. we last a segment And when to said of number this excluding adjusted couple you look would beat EBITDA this X.X% all

we margins. look at But where to a that will by be high. the do maybe the segment pretty forward to big and you to then right stuff margins and order type once being adjusted not in increase. know a lot but have to you number, know of going beyond, that margins you’re you now, pretty in our the the XXXX X% over-the-horizon So, line get bottom our opportunities, over-the-horizon if uplift QX know we’re is, QX, will QX fact see are you to EBITDA in, And comes but drops and looking that get shipping suppressed to QX good that we these in the stuff, if our

significant level. that I So, expansion think answer from is short with our bottom is, QX

business? either greater is assume that government low-margin Got or been means it. level than the we’re appropriate backlog currently of And appropriate to it’s largely the transition the it from acquisition? assume past at to that being it TCS Is away since the

Yeah.

Okay.

Okay, question then, BFT-X question shape your Program great. the the that real the around that And another to on guess, and waveforms is program. over porting I revenue. of

there? should I from to about like XXXX. in How with $X.X opportunity BFT-X? potential mentioned you that mentioned think ramp million specifically Does you, the for $X what know looks that you You we sell transceivers. that million, noted

don't for think at the any certainly in FY any plan we XXXX, our have of I any, moment. upside

small of pieces of of is the it's as kind of as However, you that we've waveform – not if, government has The about programs the being and it's it's for the demonstrated in receive little what finally we’re of thousands that actually forth, I from a in think always I need mentioned, tell BFT-X successful before our has transceivers substantial talking so has dental an I a that did that, in I for amount for of and But having government a very not we, when concerned, to is Anyway, there far as again, upside contract. that version with recently. us, think mentioned transceiver stress past we hundred a although the timeframe, substantially, the want us I transceivers. said BFT-X the lots to government. the that, April-May which in order funded -- get the they that the government

So, our fall lap, it for could actually FY-XXXX. that that not could we’re -- counting is opportunity certainly but an on into we’re,

Great. Okay.

BFT-X in the opportunity you is now. program difference for transceivers any to real with the future have So, contracts BFT-X participate the

Absolutely.

us in future quarter revenue Okay. on Great. Heights’ Heights there the – you the And platform? about and for then give to color maybe you’re the anything or Heights revenue revenue, see on any currently on Heights did is what can thinking you ramp

that, in And the well. them, revenue want in-house additional did really going did But pipeline it's that we bring but yes, in and them book I that we we year. millions can than we opportunity QX, Yeah, announce progresses, hope year think We we terms this in orders Heights have the QX. to to higher as And said have first. that opportunities the want before can. we is to probably we we would get into of say double-digit some

As before, it's products competitor are customers sales of products. a cycle we our and said our that longer some replacing

to asking current things not the don't certain of they’re supplier to us let so, they announce want the know information. because And

the So, getting XXXX but only in great hopefully continue we're working and XXXX, at beyond. it's ramp product pretty line, hard reception, should that and not

Just to the there. that, I add to mentioned, as believe is I traction know you

HEIGHTS used that our and platform think of that Cruise program network. is particular I Lines. be I a opportunity, Lines the is into out be That that that has the for integrates whoever of contracts. could now think our network let's One and it, platform since statement Cruise our getting integrator bid, a are that the will come discussions right going Carnival work really mention is performance some lot for probably programs written the actually and it validation of the say of the Carnival of around by we for and I we're to

with very we’re So, happy that.

I for original know strong does bit you end and the a know quarter, -- affect year. first there you Okay. the the into that? QX ramps QX. of your it sequentially then XXXX me, think is gave of how how should expectation And know lowest you one know and into on on into we for shape QX you about guidance is the this the of mentioned you revenue the QX How pull larger? versus and Great. at a Are QX, flat we QX looking that your Thanks. does of last I guess given

revenue do but is highest QX, do going be will to higher year. than in Yeah. performance QX what that will be think QX this the We expect we I we think

a than know to when I you back, -- know by at months -- year, higher we quarter-to-quarter last on we’d at don’t million sort of performance, step it a to a the in at revenue like Street look and to of like you XXXX XX we QX and in we revenue on from basis obviously know pays use $XXX.X You don’t did be if QX would taking that that would would phrase occurs about where will, in be. think be -- a because directional amount. way you tell quarter-to-quarter. going of a we year the to the to be that but good will QX, to higher far QX to timing you some we than trailing It the is give look attention of by I everyone that likes look guesstimates, But

lot. quarter. it Congrats a That’s me. Thanks Great. Okay. the on for

Thanks.

speakers closing the additional we at over the conference turn back Comtech remarks. questions or further this And to to no any like time, for have I’d

to very excuse March. Thank joining an Okay. and much. forward again speaking Thanks everyone want we -- you for wish upcoming again Year season to I a look today. you and in holiday us New happy me, with

call. today’s This does conclude

a at may disconnect and You day. any have wonderful time