Comtech Telecommunications Corp. Modifies BFT-1 Sustainment Contract and Receives Initial Order for Year 2 of Sustainment Services

MELVILLE, N.Y.–(BUSINESS WIRE)– April 8, 2013–Comtech Telecommunications Corp. (NAS: CMTL) announced today that its Germantown, Maryland-based subsidiary, Comtech Mobile Datacom Corporation, modified its Blue Force Tracking (“BFT-1″) sustainment contract and received an initial order for Year 2 of BFT-1 sustainment services.

Due to budget pressures and administrative issues placed on the U.S. Army by the Continuing Resolution and Sequester, the U.S. government requested, and Comtech agreed to, a two year $43.6 million BFT-1 sustainment contract which modified the terms of Comtech’s previously announced three year BFT-1 sustainment contract, which had a not-to-exceed value of $80.7 million. The contract value for Year 2 was definitized at $20.8 million and has a performance period of April 1, 2013 to March 31, 2014. The contract value for Year 1 was definitized at $22.8 million. The modified two year BFT-1 sustainment contract provides the U.S. government with the ability to fund orders in stages. In connection with these modifications, Comtech received an initial $5.0 million funded order for Year 2, which includes $2.5 million for the first three months of the annual IP license fee, with the remaining funds allocated to network operations center services and telehousing. Based on indications from the U.S. Army, Comtech expects to receive additional orders aggregating $15.8 million for the remaining nine months of Year 2 (including $7.5 million of the $10.0 million annual IP license fee). As expected, Comtech also received an additional $1.1 million of funding related to the definitization of Year 1 of the BFT-1 sustainment contract (for which the Year 1 performance period ended March 31, 2013).

The U.S. Army has also informed the Company that it intends to award and fund a separate contract to Comtech to procure future BFT-1 sustainment services (including the $10.0 million annual IP license fee) for periods beyond March 31, 2014.

Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., stated, “We are pleased to continue to support the U.S. Army’s BFT-1 and MTS Programs for deployed and homeland forces. We recognize the difficult funding situation the U.S. Army is facing today and have agreed to contract changes to try to help our customer in this difficult time. We’re proud to continue our support to the U.S. Army to ensure this vital system remains operational for U.S. and Allied forces worldwide.”

Comtech Mobile Datacom Corporation, a Germantown, Maryland-based company, is engaged in the provision of satellite-based packet data communication systems …read more

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