US communications equipment maker Comtech Telecommunications is to fully integrate its Comtech Mobile Datacom Corporation and Comtech EF Data Corp subsidiaries as part of a series of organisational changes. As a result of the restructuring, Comtech…
US communications equipment maker Comtech Telecommunications is to fully integrate its Comtech Mobile Datacom Corporation and Comtech EF Data Corp subsidiaries as part of a series of organisational changes.
As a result of the restructuring, Comtech Xicom Technology president John Branscum will succeed Robert McCollum as president of Comtech EF Data Corp, its satellite communications equipment developer, from 1 August. McCollum is to retire after more than seven years at Comtech.
In announcing these changes, Stanton Sloane, president and chief executive officer of Comtech, said: “I believe that these organisational changes provide an opportunity to improve operations in a way that will strengthen our competitive position as we pursue new US government and international opportunities.”
At the end of 2014, Comtech revealed that it had pulled a potential sale after its board of directors announced that the company and its shareholders would be best served by remaining independent. The company had retained Citigroup in August 2014 to undertake a review of strategic alternatives.
At the time analysts argued that the company’s valuation would have been a significant hurdle to any deal. Comtech’s shares had been trading at a multiple of 7.3x consensus FY15 EBITDA of US$62m, a significant premium to the stock’s five-year trailing average of 4.8x. In addition, the company’s annual revenue had declined 17% on average from FY11-14.
The company, though, did make one notable change in the wake of the review, bringing in Sloane as CEO with the incumbent Fred Kornberg moving to become executive chairman.
One of Sloan’s first actions was to initiate an assessment of Comtech’s operations to determine if changes could be made to reduce operating expenses.
The company also sought to return cash to shareholders through a series of stock repurchases.
In its Q3 2015 results announcement in June, Comtech reported a US$17.8m fall in year-on-year sales to US$71.6m. This decline reflected lower net sales in its telecommunications transmission and RF microwave amplifier segments.
