Comtech changes CEOs after less than 8 months

Comtech Telecommunications Corp., a maker of satellite base stations and new generation 911 systems, Wednesday announced it has replaced its chief executive of less than eight months with chairman Ken Peterman.

Peterman, 65, who joined the Melville company's board as chairman in May, is a veteran aerospace executive, with stints at SpyGlass Group, Raytheon and as president of the government systems segment of Viasat. Peterman's appointment   as president and CEO was effective immediately. 

Shares of Comtech jumped 12.5% on the news to close at $12.32 on Wednesday.

Michael Porcelain, 52, who became Comtech's president and CEO on Dec. 31, also resigned from the board of directors.

“After serving more than 20 years as a senior executive and positioning the company for its next chapter, it is the right time for me to take a breather and spend time with my family before moving on to my next endeavor," Porcelain said in a statement.

Under the separation agreement, Porcelain will receive a lump sum severance payment of $3.4 million minus taxes in October. The agreement also includes a nondisparagement clause applying to Porcelain and the company.

Peterman's promotion completes a shake-up of top Comtech executives following a 2021 proxy fight between the company and Outerbridge Capital Management, LLC, a Manhattan investment firm.

On Dec. 16, the day before the scheduled annual meeting, Outerbridge, which had previously called for the sale of the company, entered a "cooperation agreement" with Comtech.

Under that deal, Outerbridge agreed to support the ascension of Porcelain as CEO and call off its battle for control of Comtech's board,

In July, Peterman was appointed chairman of the board, succeeding Fred Kornberg, 86, who stepped down from the board. Kornberg had served as president and CEO from 1976 to 2021.

“The refreshed board is excited to support Ken as he executes on his strategic vision for the company,” board member Lawrence Waldman said in a statement.

"I believe Comtech is uniquely positioned to capitalize on the significant investment, steepening growth trajectories and continual renewal cycles taking place in assured communications, space and satellite networks and next-generation 911 failsafe communications infrastructures,” Peterman said in a statement.

In June, Porcelain issued a letter to shareholders along with results for the quarter ended April 30. Though the company showed increased revenue compared to the previous quarter, Porcelain cited a "challenging and unpredictable" operating environment. "Elon Musk isn't the only person with a 'super bad feeling' about the economy," he said.

For the April quarter, Comtech posted a loss of 6 cents per diluted share on revenue of $122.1 million.

In announcing Peterman's appointment Wednesday, the company reiterated its revenue guidance of about $123 million for the fourth quarter and fiscal 2022 net sales of approximately $482 million.