Comtech Comments on ISS Report
Highlights value-destructive conflict of interest presented by
Notes ISS’s lack of support for Outerbridge’s unqualified candidate
Urges shareholders to vote “FOR” both of Comtech’s superior director nominees on the BLUE proxy card
ISS correctly recognizes the transformative actions Comtech’s Board and management have taken to strengthen corporate governance and strategically reposition the company to capitalize on secular growth opportunities. These actions include executing a multi-year Board refreshment process, completing a leadership succession plan, and developing an industry-leading portfolio of products and services in rapidly growing core markets. ISS also noted the strength of our incoming CEO’s knowledge of the industry and that the Board’s leadership change has put the company on a better trajectory poised to take advantage of sector tailwinds.
Where ISS misses the mark, however, is in its failure to attribute Comtech’s recent success to these critical actions, which Comtech’s current Board and management team have been implementing for the past five years. Over this period,
We believe ISS gravely underestimates the damage that would be done if
A more comprehensive analysis of the candidates’ qualifications demonstrates that
Further, ISS fails to appreciate the importance of the
This investment more than doubles our accessible capital to invest in a generational technology renewal cycle across core markets. It also offers us important financial flexibility and liquidity as we continue to navigate the impacts of COVID-19 and supply chain issues.
We urge shareholders to consider that electing any of Outerbridge’s nominees will introduce significant risk to the Company’s strategic direction. Outerbridge has nominated these candidates with no clear plan to enhance shareholder value but has made no secret of its self-serving objectives and has been willing to use blatant misinformation, seemingly for the purpose of bolstering its reputation as an activist and aiding its fundraising efforts. The underlying impact of voting for any of Outerbridge’s red-flag candidates is clear: a hedge fund with no experience in Comtech’s industry or understanding of our business will advocate for a near-term sale or announcement of a strategic alternatives process, tactics that would benefit Outerbridge’s trading strategy by allowing it to turn a quick profit on its near-term options holdings.
By comparison, both of Comtech’s nominees on the BLUE proxy card,
Larry Waldmanhas been a critical independent voice in driving the Company’s successful transformation over the last six years. He has helped oversee the Company’s acquisition strategy (including building the NextGen 911 portfolio that Outerbridge asserts is the “crown jewel” of the company), Board refreshment, and leadership succession plan, among other value-enhancing initiatives undertaken over a number of years. Under his stewardship, the Company has generated total shareholder returns of over 120% over the last five years2, and the Company is on significantly stronger footing with significant recurring revenues and a robust new business pipeline. Judy Chambershas already overseen significant corporate governance enhancements since joining the Board in August 2021– including a plan for declassification, the completion of our leadership succession, and the appointment of two incoming directors with extensive industry experience. Her financial and M&A expertise, track record navigating infrastructure projects with public authorities, and demonstrated commitment to ESG will play an indispensable role in our value creation strategy moving forward.
Now is not the time to disrupt Comtech’s strong forward momentum and thoughtful value creation plan by supporting Outerbridge’s unqualified nominees and depriving our Board of critical skills and experience to achieve long-term growth.
YOUR VOTE IS VERY IMPORTANT!
To ensure your shares are represented, please follow the easy instructions on the BLUE proxy card to vote by telephone, by internet, or by signing, dating and returning the BLUE proxy card in the postage-paid envelope provided. If you received this letter by email, you may also vote by pressing the BLUE “VOTE NOW” button in the accompanying email. Please simply disregard any White proxy card you may receive from Outerbridge.
If you have any questions or require any assistance with voting your shares,
please call Comtech’s proxy solicitor,
Toll-Free: (877) 750-8198 (from the
Or +1 (412) 232-3651 (from other locations)
Comtech’s definitive proxy materials and other materials regarding the Board’s recommendation for the Fiscal 2021 Annual Meeting of Stockholders can be found at www.ComtechCreates.com.
Certain information in this press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties, including about our business trajectory, future revenue and sales, acquisition strategy, management and governance changes, and growth. Actual results could differ materially from such forward-looking information. Risks and uncertainties that could impact these forward-looking statements include: the possibility that the expected synergies and benefits from recent acquisitions will not be fully realized, or will not be realized within the anticipated time periods; the risk that the acquired businesses will not be integrated with the Company successfully; the possibility of disruption from recent acquisitions, making it more difficult to maintain business and operational relationships or retain key personnel; the risk that the Company will be unsuccessful in implementing a tactical shift in its Government Solutions segment away from bidding on large commodity service contracts and toward pursuing contracts for its niche products with higher margins; the nature and timing of receipt of, and the Company's performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; new product announcements and enhancements; changing customer demands and or procurement strategies; changes in prevailing economic and political conditions; changes in the price of oil in global markets; changes in foreign currency exchange rates; risks associated with the Company's legal proceedings, customer claims for indemnification, and other similar matters; risks associated with the Company’s obligations under its Credit Facility; risks associated with the Company's large contracts; risks associated with the COVID-19 pandemic and related supply chain disruptions; and other factors described in this and the Company's other filings with the
Additional Information and Where to Find It
Participants in the Solicitation
The Company, its directors, and certain of its executive officers are, and certain other members of management and employees of the Company may be deemed, “participants” in the solicitation of proxies from stockholders in connection with the matters to be considered at the 2021 Annual Meeting. Information regarding the direct and indirect interests, by security holdings or otherwise, in the Company of the persons who are or may be, under the rules of the
1 Source: Bloomberg market data as of
2 Source: Bloomberg market data as of
Comtech Investor Relations