Welcome to Comtech Telecommunications Corp.'s Conference Call for the First Quarter of fiscal 2026. As a reminder, this conference call is being recorded. I would now like to turn the call over to Maria Ceriello, Senior Director of FP&I of Comtech. Please go ahead, Maria.

Thank you, operator, and thanks, everyone, for joining us today. I'm here with Ken Traub, Comtech's Chairman, President and CEO; and Mike Bondi, our CFO. After Ken and Mike's remarks, they will be available for questions together with Daniel Gizinski, President of our Satellite and Space Communications segment; and Jeff Robertson, President of our Allerium segment. Before we get started, please note we have a detailed discussion of the quarter in the press release and 10-Q we issued this afternoon, which are available on our website as well as the SEC's website. Certain information presented in this call will include, but not be limited to, information relating to the future performance and financial condition of the company, the company's plans, objectives and business outlook and the plans, objectives and business outlook of the company's management. The company's assumptions regarding such performance, business outlook and plans are forward-looking in nature and always involve significant risks and uncertainties. Actual results could differ materially from such forward-looking information. Any forward-looking statements are qualified in their entirety by cautionary statements contained in the company's SEC filings. With that, I will turn it over to Ken. Ken?

Thank you, Maria, and good afternoon, everyone. I appreciate you joining us today. Today marks a sort of anniversary for me and a milestone for Comtech. My first day as CEO of Comtech was on January 13, 2025. And on that day, we belatedly reported the company's first quarter of fiscal 2025 financial results. Those were tough times for Comtech as we reported a GAAP net loss of over $148 million as well as significant other challenges facing the company. At the same time, I announced a transformation program anchored on earning the trust of all of our key stakeholders and restoring the company to financial health. I am delighted to confirm that Comtech has been successfully transformed. As evidenced by our recent financial reports, we are now a much stronger company in virtually every respect. Financially, operationally, organizationally and strategically. This is the result of the successful execution of our transformation initiatives and the dedication and determination of the Comtech team. Our entire team takes pride in how much we have been accomplishing and building a stronger Comtech poised to capitalize on attractive opportunities ahead in each of our business segments. Mike will discuss financial performance in detail, and I will cover some key themes. I've always believed the most important financial metric for any company and particularly a company like Comtech is cash flow. I have seen companies get into trouble when priorities shift and success is measured by other metrics such as revenue growth or non-GAAP measures like EBITDA, but cash is the key. It is what we need to pay our debts, pay our vendors and invest in our future. Consequently, the improvement in our cash flow generation is the most notable development in Comtech's financial performance. After previously reporting negative operating cash flows for multiple…

Thank you, Ken, and good afternoon, everyone. Net sales for the first quarter were $111 million. This compares to $130.4 million in the immediately preceding quarter and exceeds the midpoint of our revenue guidance provided on November 10. As anticipated, the first quarter reflects the impacts of earlier-than-anticipated orders and net sales as well as certain contracts nearing completion in the fourth quarter of fiscal 2025. Performance in the first quarter, particularly in our Satellite and Space Communications segment also reflects the impacts of timing delays in orders and net sales as a result of the recent U.S. government shutdown as well as the decision to phase out and eliminate certain low-margin revenues. Gross profit in the first quarter of fiscal 2026 was $36.8 million or 33.1% of net sales, representing a substantial 153.3% increase from the $14.5 million or 12.5% of net sales in the first quarter of fiscal 2025. The gross profit percentage in the more recent quarter also represents a sequential increase from the 31.2% of net sales in our fourth quarter of fiscal 2025. We continue to make progress in improving our product mix, including our ongoing shift back to higher volume production orders in our satellite ground infrastructure solutions product line as certain legacy low or no-margin nonrecurring engineering contracts draw nearer to completion. The sequential improvement in our quarterly gross margin percentage builds upon the quarterly trend achieved throughout fiscal 2025, which reflects the impact of our initiatives to reduce cost of goods sold and improved product mix. In our first quarter of fiscal 2026, we reported an operating loss of $2.8 million, which compares to an operating loss of $129.2 million in the first quarter of last year and an operating income of $1.9 million in the immediately preceding quarter. Our first quarters…

Thank you, Mike. To sum up briefly, Comtech has executed a successful transformation and is now a much stronger company. Our revitalized financial health is increasingly reassuring to current and prospective employees, customers and vendors. To reiterate, I believe this creates a positive flywheel effect as our recent strengthening of our financial position is reassuring to employees, which aids in retention, recruitment and motivation, reassuring for customers, particularly those that rely on us for mission-critical technologies and services and reassuring for vendors who now see us as a reliable partner, ready to deepen critical relationships. Before we move to the Q&A, I would like to highlight that we also announced today that Mary Jane Raymond has joined our Board of Directors. With Comtech's recent positive momentum, it is a good time for us to enhance our Board, and we look forward to benefiting from Mary Jane's broad governance, finance, internal control oversight, M&A and operational capabilities. Please join me in welcoming Mary Jane. As a reminder, Jeff and Daniel will be joining us for Q&A. With that, operator, please open the call to any questions.

[Operator Instructions] Our first question comes from Mike Crawford with B. Riley Securities.

First off, that $130 million of new bookings, should that all flow to backlog in the current quarter?

So a portion of it was a booking in the first quarter, and -- but the great majority of it is -- will be booking in the second quarter.

Okay. So -- and that will go into backlog in the second quarter, that's great to have a nice [ start ] for the book-to-bill. And then just more broadly, do you think of these cross currents that you've discontinued some low-margin products, but now you're transitioning the higher volume production on some new digital modems. Like how should we think about return to top line growth, whether it's this fiscal year or next?

Our focus, Mike, is optimizing for cash flow. So we have deliberately shrunk to be in the position to now regrow. We feel like we're at that inflection point, and we are in a good position where we've phased out some low-margin, unattractive business while we're focusing on better strategic, higher-margin, long-term opportunities. So we do believe that we are at that inflection point where we've improved margins, and we have attractive growth opportunities ahead.

Okay. And then just final question for me is any updated thoughts on what some of your best options are now to do with your PIK preferred stock obligation.

I'm not going to comment on that right now, Mike. It's an important element of our capital structure. And as you know, we're looking at a variety of options to improve our overall capital structure, but we're not ready to announce anything specific at this time.

[Operator Instructions] At this time, there are no further questions in queue. I will now turn the meeting back to Ken for any additional or closing remarks.

Well, thank you, operator. And with that, we'd like to wish everyone a wonderful holiday season, and we look forward to speaking with you all soon. Happy holidays.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.