Based on Long Island, New York, Comtech Telecommunications Corp. develops communications equipment in three business segments through a number of subsidiaries, serving customers such as defense contractors, satellite systems integrators, communications service providers, and oil companies. In the Telecommunications Transmission area, Comtech owns five subsidiaries;
- Comtech EF Data Corp.,
- Comtech Systems, Inc.,
- Comtech AHA Corp.,
- Comtech Antenna Systems, Inc.,
- Comtech Vipersat Networks Inc.
Each division is providing products and services for voice, video, and data transmission in satellite, wireless line-of-sight, and over-the-horizon microwave telecommunication systems. Products include modems, amplifiers, satellite transceivers, fiberglass and aluminum antennas, software to optimize satellite bandwidth usage, and forward error correction technology.
Comtech's RF Microwave Amplifiers business is conducted through a single subsidiary, Comtech PST Corp., which in turn operates Hill Engineering. Comtech PST supplies broadband high-power, high-performance RF microwave amplifiers used in a variety of military applications as well as medical oncology systems. Hill designs and produces high-power switches, limiters, and duplexers.
Comtech's third business segment is Mobile Data Communications Services, conducted through a pair of subsidiaries: Comtech Mobile Datacom Corp. and Comtech Tolt Technologies, Inc. Comtech Mobile develops mobile data communications systems for the US military, with its primary focus on the Movement Tracking System (MTS). MTS uses satellite, terrestrial, and Internet-based communications to create a way to keep track of military vehicles, ships, and aircraft while also providing two-way, real-time communications between command bases and the field. Comtech Tolt provides this technology to the civilian market, such as trucking fleets that want to track the precise location of their vehicles.
Although it has been in operation for decades, the company did not begin to enjoy exceptional growth until the late 1990’s. Revenues increased from 30.1 million USD in 1998 to more than 300 million USD in 2005. Comtech is a public company listed on the NASDAQ.
Comtech was founded in Smithtown, New York, in 1967 as Comtech Laboratories, Inc. by Jack C. Greene, who also served as the company's CEO. The company started out by designing and manufacturing satellite communications receiving equipment and related subsystems for commercial purposes. In March 1972 Comtech was taken public at 5 USD a share. Sales topped 10 million USD in 1974 and reached 16.5 million USD in 1975.
Greene stepped down as CEO in 1976, replaced Fred V. Kornberg. Born in Poland, Kornberg earned a bachelor's degree in electrical engineering at New York University in 1958 and a year later received a master's degree from the same school. He worked as a staff engineer at Radio Engineering Laboratories until 1962, and then became director of research, a position he held until 1969, when he became general manager at Nardcom Group. Kornberg joined Comtech in 1971 as an executive vice-president and general manager of the telecommunications transmission unit. Under Kornberg, Comtech expanded beyond satellite communications to become involved in the microwave transmission field through the 1977 acquisition of R.F. Systems, Inc.
Early 1980’s: Verge of Disaster
Over the next several years Comtech prospered as a manufacturer of telecommunications components and subsystems, but it suffered a significant setback in the early 1980’s serving the military market. It won a contract to install 21 satellite communication earth stations for the US Army's Signal Corps, but its 52 million USD bid proved to be a major miscalculation. On the verge of ruin, Comtech began in March 1981 to pursue a merger with Aeroflex Laboratories Inc. Talks continued for a full year before breaking off after the Army granted Comtech another 17.5 million USD to complete the contract. The price of Comtech's stock soared on the news, making it a much less attractive deal to Aeroflex.
Comtech was fortunate to break even on the Signal Corps contract and now installed safeguards to make sure there was no repetition of such a blunder. Kornberg also began to tap the financial markets to fuel an expansion drive and to become involved in the end-user segment of the telecommunications market. In 1983 the New York Times reported that Comtech offered 750,000 shares at 8.50 USD each through Drexel Burnham Lambert, Inc. The money was used to acquire Premier Microwave Corp. and Storage Technology Corp., a Colorado manufacturer of voice communications products. Comtech raised another 12 million USD to pay down debt by selling off Comtech Data Corp., which made communications equipment for the satellite, microwave, broadband, and cable markets, to Fairchild Industries.
Despite efforts to diversify its product offering, Comtech became overly dependent on large military contracts, which through much of the 1980’s accounted for more than 70 percent of revenues. With the demise of the Soviet Union, however, the US began to cut back on defense spending, forcing Comtech to make some adjustments. Having already sold Comtech Communication Corp. for 4 million USD in 1985, Comtech sold Premier Microwave in 1987, which added another 7.5 million USD in cash and notes.
Also in 1987 Comtech decided that its future lay overseas. The company had been dividing its focus between the US and foreign markets, but decided to concentrate on the international telecommunications sector, which was growing much faster than in the US. The strategy worked so well that by 1991 about two-thirds of the company's 13 million USD in revenues were the result of export sales, primarily from sale s to South America and the Pacific Rim. Of that 10 million USD, some 95% was contributed by subsidiary Comtech Systems Inc., which sold tropospheric scatter communications systems, a less expensive alternative to satellites. Tropo systems bounced radio waves off the upper atmosphere rather than a satellite. Although sales to the US military may have fallen off, the foreign military market heated up for Comtech, as some countries began to expand their military forces to compensate for a cutback in US protection.
The early 1990’s were a period of transition for Comtech. Reductions in military spending continued to cut into sales, making the decision to focus on foreign markets a wise one. Domestically, Comtech saw opportunities in the expanding wireless and satellite telecommunications as well as microwave transmissions industries. Revenues crested 22.3 million USD in 1993 then dropped in 1994 to 14.9 million USD.
Comtech created the subsidiary Comtech Communications Corp., a satellite communications equipment manufacturer that was formed in February 1994. Products included frequency converters, solid-state power amplifiers, low noise amplifiers, and satellite subsystems. By the latter part of 1995 the new unit was making a major contribution to the company's domestic commercial sales and revenues increased to 16.5 million USD.
The upward trend continued in 1996, when sales improved to 21 million USD, mostly to international sales, which for the year accounted for 56% of all revenues. This was a significant improvement over the 37% in 1995. International sales remained strong in 1997, when revenues climbed to 24.7 million USD, due to a continuing global demand for wireless and satellite telecommunications. It was a fortunate trend for Comtech, because sales to the US government continued to slip, representing 20% of all sales in 1996 but only 17% in 1997. Increased international sales of over-the-horizon microwave equipment fueled business in 1998, with revenues increasing to 30 million USD. It was at this point that Comtech was poised to enjoy exponential growth as it began to transform itself into a product-driven company.
Forming Key Subsidiaries in the Late 1990’s
In 1998 Comtech formed a pair of subsidiaries. Comtech Wireless, Inc. was established to design and manufacture Wireless Local Loop systems for the rural and remote telephony market. Comtech Mobile Datacom Corp. grew out of the acquisition of the Maryland-based Mobile Datacom Corp. to provide packet data communication services between remote mobile and fixed assets and home base using high-tech tracking technology. Applications included remote meter reading, inventory/asset in-route management, messaging, and position reporting. Although the focus of the unit was intended to be the energy and transportation markets, its Movement Tracking System (MTS) product would find a ready customer in the U.S. military. As a result, the amount of government sales, which decreased to just 9% of Comtech's total revenues in 2000 began to surge.
In June 1999 the US Army signed an 8-year, 418 million USD contract with Comtech to install MTS in its vehicles. The system would permit vehicles in the field to communicate with one another and to a command center. As a result, commanders would be able to know where everyone was located at any moment and maintain a constant line of communication. Aside from the income the Army contract brought in, it allowed Comtech a chance to work out any bugs in the technology, which could then be sold to trucking companies without any major changes. The first order of the contract, representing 3.1 million USD, was received in August 2000 to deploy MTS to 460 US Army logistic vehicles and mobile control stations. By the end of 2000 Comtech announced that it was now ready to offer MTS to commercial truck fleets as well.
The pace of the Army's rollout of MTS would increase sharply with the start of the Iraq War in 2003.
In May 2000 Comtech acquired EF Data, the satellite communications division of Adaptive Broadband, at a cost of 54 million USD. With annual revenues in the 100 million USD range, EF Data was larger than Comtech, which posted 38 million USD in 1999. The EF Data business was merged with Comtech Communications to become Comtech EF Data Corp. The capabilities of the two units complemented one another, resulting in the creation of a powerhouse player in the telecommunications transmission field.
Adaptive Broadband vs California Microwave
Adaptive Broadband developed products for the Broadband Wireless market and owned the wireless broadband technology that offered 25 Mb/s data rates over a 5.8 GHz point-to-mulitpoint radio link. Adaptive's technology combined TDMA and asynchronous transfer mode (ATM) technologies to manage bandwidth and to provide high data rates. Using this technology, point-to-multipoint systems could offer Internet, real-time video, and voice services. The Company had been developing the technology since their founding in 1972 under its original name, California Microwave. In April 2001, the Company changed its name from California Microwave to Adaptive Broadband, and spun out its low-growth Government business to Northrup Grumman for 93 million USD in cash.
California Microwave would adapt Adaptive's technology to extend its Terrestrial Wireless Division's narrowband radio products to higher data rates. California Microwave's EF Data satellite communication (Satcom) division would also use Adaptive's technology in its next generation of packet-switched data network products.
Also in 2000, Comtech acquired Hill Engineering for stock. Furthermore, the company gained some recognition in 2000, named by Forbes magazine as one of the top 200 best small companies in the United States, ranked 131st based on five-year and 12-month return on equity, and five-year sales an d earnings per share.
Sales increased to 66.4 million USD in 2000 and then soared to 136 million USD in 2001. Much of these increases were due to the EF Data acquisition, but the company's two other businesses also achieved record revenues, this despite the difficulties experienced by many of it’s telecommunications' customers. The Mobile Data unit continued to deploy MTS to the Army and also received its first foreign sale, a contract with a value-added reseller in Venezuela to provide MTS technology to commercial truck fleets.
The telecommunications slump finally caught up to Comtech in 2002, when revenues fell to 199.4 million USD and net income dipped below the 2 million USD. Compared with other telecommunications companies, however, it still turned in a solid year, with all segments of it s business turning a profit. Moreover, Comtech bounced back quickly in 2003, achieving a record year with sales increases across the board as the efforts of previous years came to fruition. For the year, the company posted sales of 174 million USD.
Comtech enjoyed another record year in 2004, as sales increased to 223.4 million USD. The trend continued in 2005 when Comtech's revenues topped the 300 million USD. To many people Comtech was an overnight success, but in truth the hard work of several decades was finally paying off and the Long Island-based company appeared well positioned to enjoy strong growth for some time to come.
In August 2008, Comtech Telecommunications Corp. completed the merger with Radyne Corp. The merger created a company with combined sales of 652 million USD. The whole company would be operating as Comtech EFData (CEFD), a subsidiary of Comtech Telecommunications Corp.
The acquisition also resulted in the closure of Radyne's manufacturing facilities. Radyne's satellite Earth station businesses were integrated into Comtech's EF Data facility in Tempe.
Three of Radyne's businesses, the Xicom satellite Earth station amplifiers, the AeroAstro microsatellites and the Tiernan broadcast encoding and transmission (Video and Audio Encoders/Decoders), were operated as independent product lines under the CEFD umbrella. The Tiernan brand will on future be known as Comtech TV.
On August 17th, 2009, Comtech Tiernan Video, Inc. (Comtech TV) was acquired by Canada-based International Datacasting of America, Inc. (IDC). The transaction was structured as an asset purchase agreement between the two companies at a price of 2 million USD in cash.
On June 16th, 2012 Comtech Telecommunications Corp. closed down its AeroAstro small-satellite manufacturing business following the loss of a contract with the US Navy to build a star-mapping satellite.
Comtech AeroAstro, based in Ashburn, VA, had struggled of late due to cutbacks in US government spending, and the cancellation of the Navy’s Joint Milli-Arcsecond Pathfinder Survey (JMAPS). Comtech AeroAstro was building the JMAPS satellite platform under a pair of contracts valued at 43.5 million USD, with a launch tentatively scheduled for 2015.
On September 5th, 2013 Comtech EF Data introduced their new CDM-625A Advanced Satellite Modem.
On December 12th, 2013 Cobham SATCOM and Comtech EF Data Corporation started a strategic partnership that would include the integration and productisation of Comtech EF Data's RF products across a range of Cobham SATCOM maritime antenna systems.
The new strategic partnership strengthens the existing working relationship between Cobham SATCOM and Comtech EF Data. Maritime Satcoms service providers and end-users are set to benefit from the further integration of equipment and technology between the two companies.
On February 25th, 2014 Comtech Telecommunications Corp. received a purchasing agreement from Harris CapRock Communications for satellite communications infrastructure equipment. Under the terms of the agreement, Harris CapRock will procure Advanced VSAT Solutions and RF products.
On January 26th, 2016 Comtech EF Data Expanded Executive Management Team with Appointment of Mark Toppenberg to Senior Vice President, Sales and Marketing Strategy. Mark Toppenberg held a senior business development and executive sales management position with Teledyne Microwave Solutions.
On February 23rd 2016 Comtech Telecommunications, Inc. closed the acquisition of TeleCommunication Systems (TCS). As a result of the completion of the merger, the common stock of TCS was no longer listed for trading on the Nasdaq Global Market or any other exchange, and trading ceased at the close of the markets on February 23rd.
The acquisition provides a transformational opportunity and is a significant step in Comtech’s strategy of entering complementary markets and expanding our domestic and international commercial offerings
1967: The Company is incorporated as Comtech Laboratories, Inc . by founder Jack C. Greene.
1972: The Company is taken public.
1976: Fred Kornberg is named CEO.
1981: A miscalculated bid puts Comtech on the verge of ruin.
1981: The Company pursued a merger with Aeroflex Laboratories Inc
1991: More focus on international expansion resulted in the growth of export sales.
1994: Comtech Communications Corp. is formed.
1998: Comtech Mobile Datacom was formed.
1999: Comtech is awarded a 418 million USD contract with the US Army to install Movement Tracking System (MTS) in its vehicles.
2000: Comtech acquired EF Data, the satellite communications division of Adaptive Broadband in a 54 million USD deal. After the merge the name became Comtech EF Data.
2000: Comtech acquired Hill Engineering.
2005: Sales increases to 300 million USD.
2008: Comtech EF Data acquired Radyne Corp. and integrated the satellite business in CEFD facility in Tempe. Radyne’s Tiernan was renamed into Comtech TV.
2009: Comtech TV was acquired by International Datacasting (IDC).
2012: Comtech Corp. closed down its AreoAstro small Satellite business following the loss of a contract with the US Navy to build a star-mapping satellite.
2013: Cobham SATCOM and Comtech EF Data Corporation started a strategic partnership by integrating CEFD’s RF modules into Cobham Maritime antenna systems.
2016: Comtech Telecommunications Corp, acquired TeleCommunication Systems, Inc. (TCS).