COMTECH TELECOMMUNICATIONS CORP /DE/

Our employees and our culture are regarded as keys to our success to retain top talent, boost productivity and align with our company’s mission. Our comprehensive people strategy continues to focus on developing a meaningful plan to enhance our employees’ experience and promote people-centric policies. We are passionate about building impactful employee engagement through diverse programs, initiatives, and opportunities. As part of this strategy, we aim to foster a workplace where employees feel a strong sense of belonging and connection, where their perspectives are valued, and where they are empowered to pursue opportunities that fuel their professional passions. Our People Strategy also emphasizes strategic recruitment, talent development and retention, competitive benefits and wellness programs, and a deep commitment to employee health, safety, and overall well‑being.

Employee Experience

We believe that a positive and welcoming environment leads to greater involvement and connection to the organization that fosters a sense of proactive belonging, a key component for achieving a sustainable impact. At the heart of our approach is the intentional act of bringing people together across social, cultural and experiential gaps. By creating opportunities for provocative thinking and meaningful experiences, we are able to challenge assumptions that disrupt our innate habits of thinking and behaving. We strive for an environment where all employees feel that they belong, are accepted, included, respected and supported as individuals.

We expect our employees and contractors to foster authentic connections and cultivate hospitable spaces. Our policy promotes equal employment opportunities without discrimination or harassment on the basis of race, color, national origin, religion, sex, age, disability, or any other status protected by law. Our senior leadership team drives these efforts across the enterprise to cultivate a strong culture of inclusivity and purpose.

We frequently organize events or engagements where employees are encouraged to participate to celebrate our workforce and our communities. Events include Men’s Health Awareness, Breast Cancer Awareness Month, Autism Awareness Month, and Pride Month, among others. In fiscal 2026, we continued our commemoration of "Honor Week” by spotlighting our veteran employees and recognizing their accomplishments. We are continuously working to build stronger employee connections through several new initiatives. This year we added the “Rise and Shine” award which represents the pinnacle of employee and manager recognition. In addition, we created “Appreciation Stations” at each location to provide employees an opportunity to send appreciation postcards to colleagues.

Our leadership team continues to inspire a positive corporate culture that emphasizes transparency, empowerment and accountability, in which employees are increasingly taking pride in contributing to our collective success, which has enhanced morale, employee retention and performance, as evidenced by our employee satisfaction pulse surveys and fiscal year attrition rates. Strong communication is the key to providing the foundation for an engaged workforce. Company news, employee opportunities, company initiatives and events are communicated through our company-wide intranet, monthly segment town hall meetings, company-wide town hall meetings, at least quarterly, which are led by our Chief Executive Officer and senior leadership team. We continued our "Meet the Team" series, profiling one employee each month in a monthly article released on our intranet and continued the “MORE” program (which stands for "Moments of Recognition Every Day") to showcase our appreciation for our employees' contributions and successes. To further enhance our communication strategy, we developed a “Change Champion Network” to support employees through the transition of the divestiture of most of our legacy Satellite and Space Communications segment, serving as a structured, two-way communication and readiness bridge, comprised of trusted leaders and influencers who can help reinforce consistent messages, clarify leadership intent and help surface employee sentiment, feedback and risks quickly.

Talent Acquisition and Management

To meet and execute our strategic business goals, we are committed to ensuring that our employees find their careers at Allerium filled with purpose, growth and fulfillment. We are focused on sourcing, attracting and retaining top talent, including those with engineering, science and technical backgrounds. We continuously review the skillsets required to meet our customers’ needs and reflect this review in our recruitment efforts. To promote this initiative, we use a variety of recruiting platforms aimed at attracting talent of various backgrounds and cultures and professional connections. We aim to create personalized development plans during our talent, promotion and succession planning.

We value employee development at all career stages and performance levels. We continuously invest in programs, benefits and resources to foster the personal and professional growth of our colleagues. We provide ongoing training and career development opportunities by offering courses through Comtech University, our online learning management system, and offer job-specific training to promote and develop advancement within the organization and to enhance skills.

Comtech successfully relaunched its Internship Program in fiscal 2026, restoring a structured summer development experience. The program provides project‑based assignments aligned to business objectives, paired with mentorship, professional development, and a renewed university engagement strategy to strengthen long‑term talent pipelines. Following the relaunch, the program has re‑energized internal teams and reinforced a continuous pathway from internship to co‑op and full‑time employment.

At July 31, 2026, we had a total of 1,292 employees (including temporary employees and contractors), of which 475 were employed by our discontinued operations. Allerium had 817 employees, 463 of whom were engaged in production and production support, 193 in research and development and other engineering support and 161 in marketing and administrative functions, including sales, accounting and finance, tax and information technology. None of our U.S. employees are represented by a labor union. Of our total employees, 224 are based outside of the U.S., including 124 in Canada and 84 in India. We believe our employee relations are good.

Safety and Wellness

We strive to maintain a robust health, safety and wellness program to ensure a healthy work environment, promote workforce resiliency and enhance business value. We encourage employee participation to identify opportunities for improvement and review and monitor our performance with safety committees at our local sites. Local safety committees identify safety programs and ensure completion of all training and target learning objectives.

All employees and their households have access to an employee assistance program, as well as a health advocate program to help with all aspects of benefits, family life, financial concerns, legal issues and transition to retirement. Assistance is available 365 days per year, 24 hours per day. This year, employees had an opportunity to participate in several wellness events as a company-wide challenge.

We rigorously review our benefit and compensation plans to maintain competitive packages that reflect the wellness needs of our workforce and the marketplace as part of our financial wellness initiatives. These programs include a 401(k) plan, comprehensive health packages and welfare benefits, among many others. In fiscal 2026, we introduced a commuter benefits program that provides employees with tax‑advantaged savings on eligible commuting expenses.

We support pay equity for all employees within the same geographic area, experience level and performance standards. Our job architecture program provides simplicity and clarity on roles (levels, titles, scope), mobility (visibility into potential career paths), alignment (of roles with organizational goals and objectives) and equity (a framework designed to support fair compensation practices).

Environment

We are committed to reducing our environmental impact across our value chain, including in the design of our solutions, operation of our facilities and procurement of materials. We are also committed to maintaining compliance with the various global environmental regulations that are applicable to our business, including with respect to the waste and emissions generated at our facilities. Our Board of Directors is responsible for the oversight of our environmental efforts, and the management of climate-related issues is overseen by our Chief Legal Officer.

We seek to increase efficient usage of building space and we offer our employees incentives to promote greener commuting options through rideshare programs.

We are committed to providing a workplace which values the health, safety, and well-being of our employees, contractors and visitors to our facilities, complying with Environment, Health and Safety ("EHS") legal requirements, and minimizing EHS risk. In fiscal 2026, we continued to support our EHS goals of engaging employees at all levels of the organization in the prevention of work-related injuries and illnesses, reducing environmental impacts and fostering a culture of continuous improvement.

U.S. Government Contracts and Security Clearances

The U.S. government operates on an October-to-September fiscal year. Generally, in February of each year, the President of the United States presents to the U.S. Congress ("Congress") the proposed budget for the upcoming fiscal year and from February through September of each year, the appropriations and authorization committees of Congress review the President’s budget proposals and establish the funding levels for the upcoming fiscal year. Once these levels are enacted into law, the Executive Office of the President administers the funds to the agencies. Thereafter, we can receive orders pursuant to sole-source or competitively awarded contracts, which we describe below.

The U.S. government may be unable to complete its budget process before the end of any given government fiscal year and when the fiscal budget is not approved in a timely manner, the U.S. government is required either to shut down or be funded pursuant to a "continuing resolution" that authorizes agencies of the U.S. government to continue operations but does not authorize new spending initiatives, either of which could result in reduced or delayed orders or payments for products and services we provide.

Sole-source contracts are generally awarded to a single contractor without a formal competition when a single contractor is deemed to have an expertise or technology superior to that of competing contractors or when there is an urgent need by the U.S. government that cannot wait for a full competitive process. Potential suppliers compete informally through research and development and marketing efforts. Competitively-bid contracts are awarded based on a formal proposal evaluation established by the procuring agency and interested contractors prepare bids. Competitively-bid contracts are awarded after a formal bid and proposal competition among suppliers.

The U.S. government has a stated policy direction to reduce the number of sole-source contract awards across all procuring agencies. In addition, the U.S. government is increasing the use of multiple-award IDIQ contracts to increase its procurement options. IDIQ contracts allow the U.S. government to select a group of eligible contractors for the same program. When the government awards IDIQ contracts to multiple bidders under the same program, a company that has already competed to be selected as a participant in the program must subsequently compete for individual delivery orders. As a result of this U.S. government shift toward multiple award IDIQ contracts, we expect to face greater competition for future U.S. government contracts and, at the same time, greater opportunities for us to participate in program areas that we do not currently participate in.

As a U.S. government contractor and or subcontractor, from time to time, we are subject to a variety of rules and regulations, such as the Federal Acquisition Regulation ("FAR"). Individual agencies can also have acquisition regulations. For example, the DoW implements the FAR through the U.S. Defense Federal Acquisition Regulation Supplement (commonly known as "DFARS"). For certain Federal government entities, the FAR regulates the phases of any product or service acquisition, including: acquisition planning, competition requirements, contractor qualifications, protection of source selection and vendor information, and acquisition procedures. In addition, the FAR addresses the allowability of supplier costs, while Cost Accounting Standards address how those costs can be allocated to contracts. The FAR also subjects suppliers to audits and other government reviews. These reviews cover issues such as cost, performance and accounting practices relating to our contracts. The government may challenge a supplier's costs and fees or require corrective actions which can delay programs and increase our costs. Suppliers are also required to comply with the National Industrial Security Program Operating Manual for the handling of classified materials and programs and is administered by the Defense Counterintelligence and Security Agency (“DCSA”). Suppliers who do not comply with these various regulations may lose and/or become ineligible for facility security clearances and/or participation in classified and non-classified programs.

Under firm fixed-price contracts, we perform for an agreed-upon price and we can derive benefits from cost savings, but bear the risk of cost overruns. Our cost-reimbursable type contracts typically provide for reimbursement of allowable costs incurred plus a negotiated fee. Cost-plus-incentive-fee orders typically provide for sharing with the U.S. government savings accrued from orders performed for less than the target costs and costs incurred in excess of targets up to a negotiated ceiling price (which is higher than the target cost), and for the supplier to carry the entire burden of costs exceeding the negotiated ceiling price.

In fiscal 2026, $22.4 million or 9.0% of our consolidated net sales were to the U.S. government (including sales to prime contractors to the U.S. government). Of this amount, firm fixed-price and cost-reimbursable type contracts (including fixed-fee, incentive-fee and time and material type contracts) accounted for $17.7 million and $4.7 million, respectively.