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Segment Information
12 Months Ended
Jul. 31, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
Reportable operating segments are determined based on Comtech’s management approach. The management approach, as defined by FASB ASC 280 "Segment Reporting" is based on the way that the CODM organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our CODM, for purposes of FASB ASC 280, is our Chief Executive Officer. We manage our business through the following reportable operating segments:

Our Commercial Solutions segment offers satellite ground station technologies (such as modems and amplifiers) and public safety and location technologies (such as 911 call routing, 911 call handling and mapping solutions) to commercial customers and smaller government customers, such as state and local governments. This segment also serves certain large government customers (including the U.S. government) that have requirements for off-the-shelf commercial equipment.

Our Government Solutions segment provides tactical satellite-based networks and ongoing support for complicated communications networks, troposcatter systems and solid-state, high-power amplifiers to large government end-users (including those of foreign countries), large international customers and domestic prime contractors.

Our CODM primarily uses a metric that we refer to as Adjusted EBITDA to measure an operating segment’s performance and to make decisions about resources to be allocated. Our Adjusted EBITDA metric for the Commercial Solutions and Government Solutions segments do not consider any allocation of indirect expense, or any of the following: income taxes, interest (income) and other, write-off of deferred financing costs, interest expense, amortization of stock-based compensation, amortization of intangible assets, depreciation expense, estimated contract settlement costs, settlement of intellectual property litigation, acquisition plan expenses, restructuring costs, COVID-19 related costs, strategic emerging technology costs (for next-generation satellite technology), facility exit costs, strategic alternatives expenses, proxy solicitation related costs and other. These items, while periodically affecting our results, may vary significantly from period to period and may have a disproportionate effect in a given period, thereby affecting the comparability of results. Any amounts shown in the Adjusted EBITDA calculation for our Commercial Solutions and Government Solutions segments are directly attributable to those segments. Our Adjusted EBITDA is also used by our management in assessing the Company's operating results. Although closely aligned, the Company's definition of Adjusted EBITDA is different than the Consolidated EBITDA (as such term is defined in our Credit Facility) utilized for financial covenant calculations and also may differ from the definition of EBITDA or Adjusted EBITDA used by other companies and, therefore, may not be comparable to similarly titled measures used by other companies.
Operating segment information, along with a reconciliation of segment net income (loss) and consolidated net income to Adjusted EBITDA is presented in the tables below:

 Fiscal Year Ended July 31, 2021
 Commercial SolutionsGovernment SolutionsUnallocatedTotal
Net sales$360,146,000 221,549,000 — $581,695,000 
Operating income (loss)$41,064,000 8,402,000 (117,764,000)$(68,298,000)
Net income (loss)$39,200,000 9,553,000 (122,233,000)$(73,480,000)
 Provision for (benefit from) income taxes1,794,000 (1,376,000)(1,918,000)(1,500,000)
 Interest (income) and other68,000 161,000 (368,000)(139,000)
 Interest expense2,000 64,000 6,755,000 6,821,000 
 Amortization of stock-based compensation— — 9,983,000 9,983,000 
 Amortization of intangibles17,054,000 3,966,000 — 21,020,000 
 Depreciation7,451,000 1,586,000 342,000 9,379,000 
 Acquisition plan expenses(1,052,000)— 101,344,000 100,292,000 
 Restructuring costs1,804,000 978,000 — 2,782,000 
 COVID-19 related costs— 1,046,000 — 1,046,000 
 Strategic emerging technology costs— 315,000 — 315,000 
Adjusted EBITDA$66,321,000 16,293,000 (6,095,000)$76,519,000 
Purchases of property, plant and equipment$10,899,000 5,055,000 83,000 $16,037,000 
Long-lived assets acquired in connection with acquisitions$45,515,000 2,443,000 — $47,958,000 
Total assets at July 31, 2021$738,095,000 232,763,000 22,253,000 $993,111,000 

 Fiscal Year Ended July 31, 2020
 Commercial SolutionsGovernment SolutionsUnallocatedTotal
Net sales$353,730,000 262,985,000 — $616,715,000 
Operating income (loss)$34,820,000 19,988,000 (39,634,000)$15,174,000 
Net income (loss)$34,414,000 20,232,000 (47,626,000)$7,020,000 
 Provision for (benefit from) income taxes410,000 (100,000)1,980,000 2,290,000 
 Interest (income) and other(31,000)(169,000)10,000 (190,000)
 Interest expense27,000 25,000 6,002,000 6,054,000 
 Amortization of stock-based compensation— — 9,275,000 9,275,000 
 Amortization of intangibles17,325,000 4,270,000 — 21,595,000 
 Depreciation8,347,000 1,446,000 768,000 10,561,000 
 Estimated contract settlement costs444,000 — — 444,000 
 Acquisition plan expenses751,000 — 20,003,000 20,754,000 
Adjusted EBITDA$61,687,000 $25,704,000 $(9,588,000)$77,803,000 
Purchases of property, plant and equipment$5,281,000 1,617,000 327,000 $7,225,000 
Long-lived assets acquired in connection with acquisitions$6,060,000 32,391,000 — $38,451,000 
Total assets at July 31, 2020$647,964,000 232,052,000 49,631,000 $929,647,000 
 Fiscal Year Ended July 31, 2019
 Commercial SolutionsGovernment SolutionsUnallocatedTotal
Net sales$357,293,000 314,504,000 — $671,797,000 
Operating income (loss)$36,053,000 28,997,000 (23,643,000)$41,407,000 
Net income (loss)$35,888,000 29,029,000 (39,876,000)$25,041,000 
 Provision for income taxes19,000 — 3,850,000 3,869,000 
 Interest (income) and other75,000 (41,000)1,000 35,000 
 Write-off of deferred financing costs— — 3,217,000 3,217,000 
 Interest expense71,000 9,000 9,165,000 9,245,000 
 Amortization of stock-based compensation— — 11,427,000 11,427,000 
 Amortization of intangibles14,944,000 3,376,000 — 18,320,000 
 Depreciation9,265,000 1,891,000 771,000 11,927,000 
 Estimated contract settlement costs6,351,000 — — 6,351,000 
 Settlement of intellectual property litigation — — (3,204,000)(3,204,000)
 Acquisition plan expenses— — 5,871,000 5,871,000 
 Facility exit costs— 1,373,000 — 1,373,000 
Adjusted EBITDA$66,613,000 35,637,000 (8,778,000)$93,472,000 
Purchases of property, plant and equipment$6,293,000 1,902,000 590,000 $8,785,000 
Long-lived assets acquired in connection with acquisitions$60,693,000 — — $60,693,000 
Total assets at July 31, 2019$662,580,000 186,438,000 38,693,000 $887,711,000 

Unallocated expenses result from corporate expenses such as executive compensation, accounting, legal and other regulatory compliance related costs and also includes all of our amortization of stock-based compensation. During fiscal 2021, 2020 and 2019, we recorded $100,292,000, $20,754,000 and $5,871,000 of acquisition plan expenses, respectively, most of which were recorded primarily in our unallocated expenses. See Note (2) -"Acquisitions" for further information. In addition, offsetting unallocated expenses in fiscal 2019 is a $3,204,000 benefit as a result of a favorable ruling issued by the U.S. Court of Appeals for the Federal Circuit related to a legacy TCS intellectual property matter.

During fiscal 2021, our Commercial Solutions segment recorded $1,804,000 of restructuring costs incurred to shift production of our key satellite earth station products to a new 146,000 square foot facility in Chandler, Arizona. There were no such charges recorded in fiscal 2020 or 2019.

During fiscal 2021, our Government Solutions segment recorded $978,000 of restructuring costs incurred to consolidate certain administrative and operating functions in our tactical communications technologies product line. In addition, during fiscal 2021, this segment also recorded $1,046,000 of incremental operating costs related to our antenna facility located in the United Kingdom due to the impact of the COVID-19 pandemic, which resulted in a temporary but complete shut-down of this facility. There were no such charges recorded in fiscal 2020 or 2019.

Interest expense in the tables above primarily relates to our Credit Facility, and includes the amortization of deferred financing costs. See Note (7) - "Credit Facility" for further discussion. In addition, interest expense for fiscal 2021 includes $1,178,000 of incremental interest expense related to a now terminated financing commitment letter, as discussed in more detail in Note (2) - "Acquisitions." During fiscal 2019, we recorded a $3,217,000 loss from the write-off of deferred financing costs primarily related to the Term Loan Facility portion of our Prior Credit Facility. See Note (7) - "Credit Facility" for further discussion.
Intersegment sales in fiscal 2021, 2020 and 2019 by the Commercial Solutions segment to the Government Solutions segment were $3,481,000, $9,837,000 and $17,371,000, respectively. There were nominal sales by the Government Solutions segment to the Commercial Solutions segment for these fiscal periods. All intersegment sales are eliminated in consolidation and are excluded from the tables above.

Unallocated assets at July 31, 2021 consist principally of cash and cash equivalents, income taxes receivable, corporate property, plant and equipment and deferred financing costs. The large majority of our long-lived assets are located in the U.S.