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Comtech Telecommunications gets initial order for second year of sustainment services.

TELECOMWORLDWIRE-April 9, 2013-Comtech Telecommunications gets initial order for second year of sustainment services(C)1994-2013 M2 COMMUNICATIONS

Comtech Telecommunications Corp. (NASDAQ: CMTL) said that its Germantown, Maryland-based subsidiary, Comtech Mobile Datacom Corp., 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 US Army by the Continuing Resolution and Sequester, the US government requested, and Comtech agreed to, a two year USD43.6m 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 USD80.7m.

The contract value for Year 2 was definitized at USD20.8m and has a performance period of April 1, 2013 to March 31, 2014. The contract value for Year 1 was definitized at USD22.8m. The modified two year BFT-1 sustainment contract provides the US government with the ability to fund orders in stages. In connection with these modifications, Comtech received an initial USD5.0m funded order for Year 2, which includes USD2.5m for the first three months of the annual IP license fee, with the remaining funds allocated to network operations centre services and telehousing. Based on indications from the US Army, Comtech expects to receive additional orders aggregating USD15.8m for the remaining nine months of Year 2 (including USD7.5m of the USD10.0m annual IP license fee). As expected, Comtech also received an additional USD1.1m 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 US 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 USD10.0m annual IP license fee) for periods beyond March 31, 2014.

Comtech Telecommunications designs, develops, produces and markets innovative products, systems and services for advanced communications solutions.

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Date:Apr 9, 2013
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