Comtech Telecommunications Corp., under pressure from an activist investor, is shaking up its leadership with president and chief operating officer Michael Porcelain ascending to the top job.
Porcelain, 52, will succeed longtime chief executive Fred Kornberg by year's end, the company announced after the stock market close Monday.
Shares of Comtech tumbled 10.8% to close Tuesday at $22.63.
Kornberg, 85, is expected to become nonexecutive chairman of the board and an adviser on technology matters, the company said.
On Monday, Comtech reported net sales of $145.8 million for the quarter ended July 31, down from $149.7 million in the year-earlier quarter. Net income was $7.4 million versus $1.1 million in the 2020 period.
In September, Manhattan-based Outerbridge Capital Management LLC announced it is nominating three independent candidates to the board of the Melville company.
In June, Outerbridge issued an open letter to board members in which it derided Comtech's management and stock performance,
Joe Gomes, an analyst for Noble Capital Markets Inc., a broker-dealer that provides company-sponsored research, said that Porcelain has been instrumental in driving the company's emergency 911 business.
Still, he said, it's unclear if the move "will satisfy Outerbridge."
An Outerbridge spokesman said it would have no comment on the "real-time situation."
Porcelain will retain his title as president and join the board of directors, said the company, which has 180 employees in Melville and more than 2,000 worldwide.
Porcelain previously served as Comtech's vice president of finance and internal audit and chief financial officer.
Before joining Comtech, he was director of corporate profit and business planning for Symbol Technologies.
Kornberg began serving as Comtech's CEO in 1976. In 2014, Kornberg was replaced as CEO by Stanton Sloane when the company failed to find a buyer or merger partner. Sloane held the post until 2016, when he was replaced by Kornberg.
"When Fred first took on the role of CEO of Comtech, the company had less than $20 million of revenue and approximately $1 million of net income," the board of directors said in a statement. "Today, Comtech is a global leader in its markets."
Comtech is expected to benefit from the boom in low-earth-orbit satellites and the transition to more modern 911 systems that include digital capabilities.
"I believe we are extremely well positioned to extend our competitive advantages and enhance value for all stakeholders," Porcelain said in a statement.