CorpGov
5 min read
In This Article:
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Ken Traub named CEO of Comtech Telecommunications Corp. (NASDAQ: CMTL) in January after joining board in October
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Traub to oversee turnaround of Comtech, whose shares have lagged for several years
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Turnaround goals include operational discipline, supporting profitable growth, review of strategic alternatives and a stronger capital structure
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Comtech already announced $40 million capital infusion to shore up balance sheet
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Traub swiftly made a deal with activist investor, giving one Comtech board seat and agreeing on a turnaround plan
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Traub brings extensive track record with corporate governance cleanups, including successful turnaround of American Banknote Holographics
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American Bank Note Holographics saw a more-than 1,000% increase in shareholder value after sale to JDSU with Mr. Traub as President, CEO and director
By John Jannarone and Jarrett Banks
From corporate governance shortcomings to balance sheet worries, Ken Traub isn’t afraid to roll up his sleeves when he sees a company facing big structural problems. His latest mission: Turning around Comtech Telecommunications Corp. (Nasdaq: CMTL) as its new CEO.
Comtech, which provides satellite, wireless and terrestrial technologies for both commercial and military applications, hired Mr. Traub late last year as a director and within three months he ascended to President and CEO. He’s been tasked with reviving the company, whose share price has fallen steadily over the last several years.
He’s targeting a number of initiatives to right the ship, including better operational discipline, a review of strategic alternatives and a stronger capital structure. He’s already made a big step on the latter effort, announcing a $40 million capital infusion that helped cure covenant breaches on some debt, lowered interest rates and added financial flexibility.
That deal, which was announced just weeks after Mr. Traub became CEO, highlights his ability to work with all stakeholders when a company is under strain. In this case, it was existing holders of Comtech’s convertible preferred stock and subordinated debt who agreed to the deal.
To appreciate Mr. Traub’s skill set, it’s important to know more about his unusual history with troubled companies. Most notably, he arrived for his first day on the job at CFO at American Bank Note Holographics, a company with roots in the 18th century as the original printer of U.S. currency, only to quickly discover problems with the books.
“I met with auditors and management and it took me one day to realize SEC misstatements had been made,” Mr. Traub said in an interview with CorpGov. (He noted ironically that American Bank Note Holographics was itself in the business of preventing fraud).
