In October 2014, we self-disclosed to OFAC that we learned during a routine assessment of the adequacy of our export control compliance procedures that we had inadvertently neglected to obtain an OFAC license for a shipment of modems to a Canadian customer who, we learned after the transaction had begun, intended to incorporate our modems in a communication system the ultimate end user of which was the Sudan Civil Aviation Authority. OFAC regulations prohibit U.S. persons from doing business directly or indirectly in Sudan and from facilitating transactions by non-U.S. persons which would be illegal if done by a U.S. person. In late 2015, OFAC issued an administrative subpoena to us seeking further information about the previously

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We must maintain a company-wide Office of Trade Compliance - In the past, we have self-reported violations of ITAR to the DDTC and had an ITAR compliance audit performed by an independent auditor at the request of the DDTC. Although the audit found no violations of ITAR, we committed to the DDTC that we would enhance and maintain certain policies and procedures and we have established a company-wide Office of Trade Compliance. In October 2014, we self-disclosed to OFAC that we learned during a routine assessment of the adequacy of our export control compliance procedures that we had inadvertently neglected to obtain an OFAC license for a shipment of modems to a Canadian customer who, we learned after the transaction had begun, intended to incorporate our modems in a communication system the ultimate end user of which was the Sudan Civil Aviation Authority. OFAC regulations prohibit U.S. persons from doing business directly or indirectly in Sudan and from facilitating transactions by non-U.S. persons which would be illegal if done by a U.S. person. In late 2015, OFAC issued an administrative subpoena to us seeking further information about the previous voluntarily disclosed transaction and any other transactions involving Sudan. We have responded to the subpoena, including alerting OFAC to Comtech’s repair of three modems for a customer in Lebanon after which time the modems were rerouted to Sudan without Comtech’s knowledge.OFAC has not responded to our submission of further information and we cannot predict when the agency will complete its review and determine whether any violations occurred. While OFAC could decide not to impose penalties and only issue a no action or cautionary letter, we could face civil and criminal penalties and may suffer reputational harm if we are found to have violated U.S. sanctions laws. Even though we take precautions to prevent transactions with U.S. sanction targets, any such measures, or any new measures we may implement in the future, may be ineffective. As a result, there is risk that in the future we could provide our products to or permit our products to be downloaded or accessed by such targets despite these precautions. This could result in negative consequences to us, including government investigations, penalties and reputational harm.

OFAC has not responded to our submission of further information and we cannot predict when the agency will complete its review and determine whether any violations occurred. While OFAC could decide not to impose penalties and only issue a no action or cautionary letter, we could face civil and criminal penalties and may suffer reputational harm if we are found to have violated U.S. sanctions laws. Even though we take precautions to prevent transactions with U.S. sanctions targets, any such measures, or any new measures we may implement in the future,We may be ~~ineffective. As a result, there is risk that in the~~subject to future we could provide our products to or permit our products to be downloaded or accessed by such targets despite these precautions. This could result in negative consequences to us, including government investigations, penalties and reputational harm.export compliance audits

- We continue to implement policies and procedures to ensure that we comply with all applicable export control laws and regulations. In the future, we may be subjected to compliance audits in the future that may uncover improper or illegal activities that would subject us to material remediation costs, civil and criminal fines and/or penalties and/or an injunction. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us. Each of these outcomes could, individually or in the aggregate, have a material adverse effect on our business, results of operation and financial condition.

The absence of comparable restrictions on competitors in other countries may adversely affect our competitive position. In addition, in order to ship our products into and implement our services in some countries, the products must satisfy the technical requirements of that particular country. If we were unable to comply with such requirements with respect to a significant quantity of our products, our sales in those countries could be restricted, which could have a material adverse effect on our business, results of operation and financial condition.

Our investments in recorded goodwill and other intangible assets could be impaired as a result of future business conditions, ~~further~~a deterioration of the global economy or if we change our reporting unit structure.

As of July 31, ~~2016,~~2017, goodwill recorded on our Consolidated Balance Sheet aggregated ~~$287.6~~$290.6 million. Additionally, as of July 31, ~~2016,~~2017, net intangibles recorded on our Consolidated Balance Sheet aggregated ~~$284.7~~$261.9 million. In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 350, "Intangibles - Goodwill and Other," we perform a goodwill impairment analysis at least annually (in the first fiscal quarter of each fiscal year), unless indicators of impairment exist in interim periods. If we fail the required Step One test as described in FASB ASC 350, we would do a Step Two test which compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit (including any unrecognized intangibles) as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess.

It is possible that, during future financial periods, business conditions (both in the U.S. and internationally) could deteriorate from the current state and our current or prospective customers could materially postpone, reduce or even forgo purchases of our products and services to a greater extent than we currently anticipate. If assumed net sales and cash flow projections are not achieved in future periods, our Commercial Solutions or Government Solutions reporting units could be at risk of failing Step One of the goodwill impairment test and goodwill and intangibles assigned to the respective reporting units could be impaired.

For purposes of reviewing impairment and the recoverability of goodwill and other intangible assets, ~~both the~~our Government Solutions and Commercial Solutions ~~segments~~segment each constitute a reporting unit and we must make various assumptions ~~regarding estimated future cash flows and other factors~~ in determining ~~the~~their estimated fair ~~values of each respective reporting unit.~~values. Reporting units are defined by how our President and Chief Executive Officer ("CEO") manages the business, which includes resource allocation decisions. We may, in the future, change our management approach which in turn may change the way we define our reporting units, as such term is defined by ~~FASB ASC 350.~~Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 350 "Intangibles - Goodwill and Other." A change to our management approach may require us to perform an interim goodwill impairment test and ~~ultimately~~possibly record impairment charges in a future period.

In accordance with FASB ASC 350, we perform a goodwill impairment analysis at least annually (in the first fiscal quarter of each fiscal year), unless indicators of impairment exist in interim periods. If we fail the quantitative assessment of goodwill impairment ("quantitative assessment"), pursuant to our adoption of FASB ASU No. 2017-04 in fiscal 2017, we would be required to recognize an impairment loss equal to the amount that a reporting unit's carrying value exceeded its fair value; however, any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

On August 1, ~~2016~~2017 (the first day of our fiscal ~~2017)~~2018), we performed our annual quantitative assessment ~~(commonly referred to as a Step One test)~~ and estimated the fair value of each of our reporting units using a combination of the income and market ~~approach.~~approaches. Based on our quantitative evaluation, we determined that our Commercial Solutions and Government Solutions reporting units had estimated fair values in excess of their carrying values of at least ~~11.8%~~17.8% and ~~40.5%~~52.9%, respectively, and concluded that our goodwill was not ~~impaired.~~impaired and that neither of our two reporting units was at risk of failing the quantitative assessment. It is possible that, during fiscal 2018 or beyond, business conditions (both in the U.S. and internationally) could deteriorate from the current state, our current or prospective customers could materially postpone, reduce or even forgo purchases of our products and services to a greater extent than we currently anticipate or our common stock price could decline. A significant decline in our customers' spending that is greater than we anticipate or a shift in funding priorities may also have a negative effect on future orders, sales, income and cash flows and we might be required to perform an interim quantitative assessment during fiscal 2018 or beyond. If ~~we had~~assumed net sales and cash flow projections are not ~~utilized the market approach,~~achieved in future periods or our common stock price significantly declines from current levels, our Commercial Solutions or Government Solutions reporting ~~unit's goodwill would~~units could be at risk of ~~impairment. During interim periods,~~failing the quantitative assessment and goodwill and intangibles assigned to the respective reporting units could be impaired.

In any event, we are required to perform the next annual goodwill impairment analysis on August 1, 2018 (the start of our fiscal 2019). If our assumptions and related estimates change in the future, or if we change our ~~expected financial results materially decline below our initial expectations~~reporting unit structure or if other events and circumstances change ~~which indicate the potential for impairment~~ (e.g., a sustained decrease in the price of our common stock (considered on both absolute terms and relative to peers)), we may be required to record ~~interim~~ impairment charges when we perform ~~and fail an interim test~~these tests, or in other future periods. ~~In any event, we are required to perform the next annual goodwill impairment analysis on August 1, 2017 (the start of our fiscal 2018).~~

In addition to our impairment analysis of goodwill, we also review net intangibles with finite lives when an event occurs indicating the potential for impairment. ~~No events were identified during the fiscal year ended July 31, 2016. As such, we~~We believe that the carrying values of our net intangibles were recoverable as of July 31, ~~2016.~~2017. Any impairment charges that we may record in the future could ~~have a~~be material ~~adverse effect on~~to our results of operation and financial condition.

We could be negatively impacted by a systems failure or security breach through cyber-attack, cyber intrusion or otherwise, by other significant disruption of our IT networks or those we operate for certain customers, or third party data center facilities, servers and related systems.

~~We face the~~Similar to all companies in our industry, we are under constant risk of a security ~~breach or~~breaches and other significant ~~disruption~~attacks on and disruptions of our IT networks and related systems, including third party data center facilities, whether through ~~cyber-attack~~actual breaches, cyber-attacks or cyber ~~intrusion~~intrusions via the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization. ~~The risk of a~~Actual security ~~breach~~breaches or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, ~~has~~have increased ~~as the number, intensity~~in recent years and ~~sophistication of attempted attacks and intrusions from around the world~~ have ~~increased.~~become more complex. Our IT network and systems, as well as third party data center facilities, have been and, we believe, continue to be under constant attack. We face an added risk of a security breach or other significant disruption to certain of our equipment used on some of our customer’s IT networks and related systems which may involve managing and protecting information relating to national security and other sensitive government functions. We may incur significant costs to prevent ~~such~~and respond to actual breaches, cyber-attacks and other systems disruptions.

As a communications company, and particularly as a government contractor and a provider of 911 systems, we face a heightened risk of a security breach or disruption from actual breaches, cyber-attacks and other threats to gain unauthorized access to our and our customers' proprietary or classified information on our IT networks, third party data center facilities and related systems and to certain of our equipment used on some of our customer’s IT networks and related systems. These types of information and IT networks and related systems are critical to the operation of our business and essential to our ability to perform day-to-day operations, and, in some cases, are critical to the operations of certain of our customers. Although we make significant efforts to maintain the security and integrity of these types of information and IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that ~~attempted~~actual security breaches or disruptions will not be successful or damaging. Even the most well protected information, networks, data centers, systems and facilities remain potentially vulnerable because ~~attempted~~ security breaches, particularly cyber-attacks and intrusions, or disruptions have occurred and will occur again in the ~~future, and because the techniques~~future. Techniques used in such ~~attempts~~breaches and cyber-attacks are constantly evolving and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. In some cases, the resources of foreign governments may be behind such attacks. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is virtually impossible for us to entirely mitigate this risk.

A security breach or other significant disruption involving these types of information and IT networks and related systems could:

Disrupt the proper functioning of these networks, data center facilities and systems and therefore our operations and/or those of certain of our customers;

Result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or our customers, including trade secrets, which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes;

Compromise national security and other sensitive government functions;

Require significant management attention and resources to remedy the damages that result; and

Damage our reputation with our customers (particularly agencies of the U.S. government) and the public generally.

In addition, the cost of continually defending against cyber-attacks and actual breaches has increased in recent years and future costs and any or all of the foregoing could have a material adverse effect on our business, results of operation and financial condition.

The measures we have implemented to secure information we collect and store or enable access to may be breached, which could cause us to breach agreements with our partners and expose us to potential investigation and penalties by authorities and potential claims for contract breach, product liability damages, credits, penalties or termination by persons whose information was disclosed.

We take reasonable steps to protect the security, integrity and confidentiality of the information we collect and store and to prevent unauthorized access to third party data to which we enable access through our products, but there is no guarantee that inadvertent or unauthorized disclosure will not occur or that third parties will not gain unauthorized access despite our efforts. If such unauthorized disclosure or access does occur, we may be required to notify persons whose information was disclosed or accessed under existing and proposed laws. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We also may be subject to claims of breach of contract for such disclosure, investigation and penalties by regulatory authorities and potential claims by persons whose information was disclosed. If there is a security breach or if there is an inappropriate disclosure of any of these types of information, we could be exposed to investigations, litigation, fines and penalties. Remediation of and liability for loss or misappropriation of end user or employee personal information could have a material adverse effect on our business, results of operation and financial condition. Even if we were not held liable for such event, a security breach or inappropriate disclosure of personal, private or confidential information could harm our reputation and our relationships with current and potential customers and end users. Even the perception of a security risk could inhibit market acceptance of our products and services. We may be required to invest additional resources to protect against damages caused by any actual or perceived disruptions of our services. We may also be required to provide information about the location of an end user’s mobile device to government authorities, which could result in public perception that we are providing the government with intelligence information and deter some end users from using our services. Any of these developments could have a material adverse effect on our business, results of operation and financial condition.

Our U.S. Federal, state and foreign tax returns are subject to audit and a resulting tax assessment or settlement could have a material adverse effect on our business, results of operation and financial condition. Significant judgment is required in determining the provision for income taxes.

The final determination of tax examinations and any related litigation could be materially different than what is reflected in historical income tax provisions and accruals. ~~The Internal Revenue Service (“IRS”) has recently audited our federal income tax return for fiscal 2014 and our~~Our federal income tax returns for fiscal ~~2013~~2015 and ~~2015~~2016 remain subject to potential future ~~IRS~~Internal Revenue Service ("IRS") audits. In addition, TCS's federal income tax returns for calendar ~~year~~years 2013 through 2015 and the tax period from January 1, 2016 to February 23, 2016 are subject to potential future IRS ~~audit.~~audits. In addition to income tax audits, TCS is subject to ongoing state and local tax audits by the Washington State Department of Revenue and the City of Seattle. Although adjustments relating to past audits of our federal tax returns (including the recent audit of fiscal 2014) were immaterial, a resulting tax assessment or settlement for other periods or other jurisdictions that may be selected for future audit could have a material adverse effect on our business, consolidated results of operation and financial condition.

We have significant operations in Arizona, Florida, California, Washington State, New York and other locations which could be materially and adversely impacted in the event of a terrorist attack and government responses thereto or significant disruptions (including natural disasters) to our business.

Terrorist attacks, the U.S. and other governments' responses thereto, and threats of war could materially adversely impact our business, results of operation and financial condition. For example, our 911, hosted location-based services and satellite teleport services operations depend on our ability to maintain our computer and equipment and systems in effective working order, and to protect our systems against damage from fire, natural disaster, power loss, telecommunications failure, sabotage, unauthorized access to our system or similar events. Although all of our mission-critical systems and equipment are designed with built-in redundancy and security, any unanticipated interruption or delay in our operations or breach of security could have a material adverse effect on our business, results of operation and financial condition. Our property and business interruption insurance may not be adequate to compensate us for any losses that may occur in the event of a terrorist attack, threat, system failure or a breach of security. Insurance may not be available to us at all or, if available, may not be available to us on commercially reasonable terms.

We operate a high-volume technology manufacturing center located in Tempe, Arizona. We expect intercompany manufacturing to increase from current levels in future periods and we intend to maximize the use of our high-volume technology manufacturing center by continuing to seek contracts with third parties to outsource a portion of their manufacturing to us. A terrorist attack or similar future event may disrupt our operations or those of our customers or suppliers and may affect the availability of materials needed to manufacture our products or the means to transport those materials to manufacturing facilities and finished products to customers. If a natural disaster or other business interruption occurred with respect to our high-volume technology manufacturing center, we do not have immediate access to other manufacturing facilities and, as a result, our business, results of operation and financial condition would be materially adversely affected.

We design and manufacture our over-the-horizon microwave equipment and systems in Florida, where major hurricanes have occurred in the past, and traveling wave tube amplifiers in Santa Clara, California, an area close to major earthquake fault lines, and also manufacture amplifiers in Melville, New York, an area subject to hurricanes. Additionally, certain of our Commercial Solutions segment activities are conducted in Washington State which is also near a fault line. Our operations in these and other locations (such as in our high-volume technology manufacturing center located in Tempe, Arizona), could be subject to natural disasters or other significant disruptions, including hurricanes, tornadoes, typhoons, tsunamis, floods, earthquakes, fires, water shortages, other extreme weather conditions, medical epidemics, acts of terrorism, power shortages and blackouts, telecommunications failures, and other natural and man-made disasters or disruptions.

We cannot be sure that our systems will operate appropriately if we experience hardware or software failure, intentional disruptions of service by third parties, an act of God or an act of war. A failure in our systems could cause delays in transmitting data, and as a result we may lose customers or face litigation that could involve material costs and distract management from operating our business.

In the event of any such disaster or other disruption, we could experience disruptions or interruptions to our operations or the operations of our suppliers, distributors, resellers or customers; destruction of facilities; and/or loss of life, all of which could materially increase our costs and expenses and materially adversely affect our business, results of operation and financial condition.

We may be subject to environmental liabilities.

We engage in manufacturing and are subject to a variety of local, state and federal laws and regulations relating to the storage, discharge, handling, emission, generation, manufacture and disposal of toxic or other hazardous substances used to manufacture our products. We are also subject to the Restriction of Hazardous Substance ("RoHS") directive which restricts the use of lead, mercury and other substances in electrical and electronic products. The failure to comply with current or future environmental requirements could result in the imposition of substantial fines, suspension of production, alteration of our manufacturing processes or cessation of operations that could have a material adverse effect on our business, results of operation and financial condition. In addition, the handling, treatment or disposal of hazardous substances by us or our predecessors may have resulted, or could in the future result, in contamination requiring investigation or remediation, or lead to other liabilities, any of which could have a material adverse effect on our business, results of operation and financial condition.

The success of our business is dependent on compliance with FCC rules and regulations and similar foreign laws and regulations.

Many of our products are incorporated into wireless communications systems that must comply with various U.S. government regulations, including those of the FCC, as well as similar international laws and regulations. As a result, our business faces increased risks including the following:

We must obtain various licenses from the FCC - We operate FCC licensed teleports that are subject to the Communications Act of 1934, as amended, or the FCC Act, and the rules and regulations of the FCC. We cannot guarantee that the FCC will grant renewals when our existing licenses expire, nor are we assured that the FCC will not adopt new or modified technical requirements that will require us to incur expenditures to modify or upgrade our equipment as a condition of retaining our licenses. We may, in the future, be required to seek FCC or other government approval if foreign ownership of our stock exceeds certain specified criteria. Failure to comply with these policies could result in an order to divest the offending foreign ownership, fines, denial of license renewal and/or license revocation proceedings against the licensee by the FCC, or denial of certain contracts from other U.S. government agencies.

We are dependent on the allocation and availability of frequency spectrum - Adverse regulatory changes related to the allocation and availability of frequency spectrum and in the military standards and specifications that define the current satellite networking environment, could materially harm our business by: (i) restricting development efforts by us and our customers, (ii) making our current products less attractive or obsolete, or (iii) increasing the opportunity for additional competition. The increasing demand for wireless communications has exerted pressure on regulatory bodies worldwide to adopt new standards and reassign bandwidth for these products and services. The reduced number of available frequencies for other products and services and the time delays inherent in the government approval process of new products and services have caused, and may continue to cause, our customers to cancel, postpone or reschedule their installation of communications systems including their satellite, over-the-horizon microwave, or terrestrial line-of-sight microwave communication systems. This, in turn, could have a material adverse effect on our sales of products to our customers. Changes in, or our failure to comply with, applicable laws and regulations could materially adversely harm our business, results of operation, and financial condition.

Our future growth is dependent, in part, on developing NG911 compliant products - The FCC requires that certain location information be provided to network operators for public safety answering points when a subscriber makes a 911 call. Technical failures, greater regulation by federal, state or foreign governments or regulatory authorities, time delays or the significant costs associated with developing or installing improved location technology could slow down or stop the deployment of our mobile location products. If deployment of improved location technology is delayed, stopped or never occurs, market acceptance of our products and services may be materially adversely affected. Because we rely on some third-party location technology instead of developing all of the technology ourselves, we have little or no influence over its improvement. The technology employed with NG911 services generally anticipates a migration to internet-protocol (“IP”) based communication. Since many companies are proficient in IP-based communication protocols, the barriers to entry to providing NG911 products and services are lower than exist for the traditional switch-based protocols. If we are unable to develop unique and proprietary solutions that are superior to and more cost effective than other market offers, our 911 business could get replaced by new market entrants, resulting in a material adverse effect on our business, results of operation and financial condition.

Under the FCC’s mandate, our 911 business is dependent on state and local governments - Under the FCC’s mandate, wireless carriers are required to provide 911 services only if state and local governments request the service. As part of a state or local government’s decision to request 911, they have the authority to develop cost recovery mechanisms. However, cost recovery is no longer a condition to wireless carriers’ obligation to deploy the service. If state and local governments do not widely request that 911 services be provided or we become subject to significant pressures from wireless carriers with respect to pricing of 911 services, our 911 business would be harmed and future growth of our business would be reduced.

Regulation of the mobile industry and VoIP is evolving, and unfavorable changes or our failure to comply with existing and potential new legislation or regulations could harm our business and operating results.

As the mobile industry continues to evolve, we believe greater regulation by federal, state or foreign governments or regulatory authorities is likely and we face certain risks including:

We must adhere to existing and potentially new privacy rules related to mobile-location based services - We believe increased regulation is likely in the area of data privacy, and laws and regulations applying to the solicitation, collection, processing or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing our ability to utilize this information for the purpose of continued improvement of the overall mobile subscriber experience. In order for mobile location products and services to function properly, wireless carriers must locate their subscribers and store information on each subscriber’s location. Although data regarding the location of the wireless user resides only on the wireless carrier’s systems, users may not feel comfortable with the idea that the wireless carrier knows and can track their location. Carriers will need to obtain subscribers’ permission to gather and use the subscribers’ personal information, or they may not be able to provide customized mobile location services which those subscribers might otherwise desire. If subscribers view mobile location services as an annoyance or a threat to their privacy, that could reduce demand for our products and services and have a material adverse effect on our business, results of operation and financial condition.

We may face increased compliance costs in connection with health and safety requirements for mobile devices - If wireless handsets pose health and safety risks, we may be subject to new regulations and demand for our products and services may decrease. Media reports have suggested that certain radio frequency emissions from wireless handsets may be linked to various health concerns, including cancer, and may interfere with various electronic medical devices, including hearing aids and pacemakers. Concerns over radio frequency emissions may have the effect of discouraging the use of wireless handsets, which would decrease demand for our services. In recent years, the FCC and foreign regulatory agencies have updated the guidelines and methods they use for evaluating radio frequency emissions from radio equipment, including wireless handsets. In addition, interest groups have requested that the FCC investigate claims that wireless technologies pose health concerns and cause interference with airbags, hearing aids and other medical devices. There also are some safety risks associated with the use of wireless handsets while driving. Concerns over these safety risks and the effect of any legislation that may be adopted in response to these risks could limit our ability to market and sell our products and services.

The regulatory environment for VoIP services is developing - The FCC has determined that VoIP services are not subject to the same regulatory scheme as traditional wireline and wireless telephone services. If the regulatory environment for VoIP services evolves in a manner other than the way we anticipate, our 911 business would be significantly harmed and future growth of our business would be significantly reduced. For example, the regulatory scheme for wireless and wireline service providers requires those carriers to allow service providers such as us to have access to certain databases that make the delivery of a 911 call possible. No such requirements exist for VoIP service providers, so carriers could prevent us from continuing to provide VoIP 911 service by denying us access to the required databases.

All of our business activities are subject to rapid technological change, new entrants, the introduction of other distribution models and long development and testing periods each of which may harm our competitive position, render our product or service offerings obsolete and require us to continuously develop technology and/or obtain licensed technology in order to compete successfully.

We are engaged in business activities characterized by rapid technological change, evolving industry standards, frequent new product announcements and enhancements, and changing customer demands. The introduction of products and services on future industry standards embodying new technologies such as multi-frequency time-division multiple access ("MF-TDMA") based technologies could render any of our products and services obsolete or non-competitive. The successful execution of our business strategy is contingent upon wireless network operators launching and maintaining mobile location services, our ability to maintain a technically skilled development and engineering team, our ability to create new network software products and adapt our existing products to rapidly changing technologies, industry standards and customer needs. As a result of the complexities inherent in our product offerings, new technologies may require long development and testing periods. Additionally, new products may not achieve market acceptance or our competitors could develop alternative technologies that gain broader market acceptance than our products. If we are unable to develop and introduce technologically advanced products that respond to evolving industry standards and customer needs, or if we are unable to complete the development and introduction of these products on a timely and cost effective basis, it could have a material adverse effect on our business, results of operation and financial condition or could result in our technology becoming obsolete.

New entrants seeking to gain market share by introducing new technology and new products may make it more difficult for us to sell our products and services and could create increased pricing pressure, reduced profit margins, increased sales and marketing expenses, or the loss of market share or expected market share, any of which could have a material adverse effect on our business, results of operation and financial condition. For example, many companies are developing new technologies and the shift towards open standards such as IP-based satellite networks will likely result in increased competition and some of our products may become commoditized. Our DoubleTalk® Carrier-in-Carrier® bandwidth compression technology is licensed by us from a third party that maintains patents associated with the technology. Other competitors have developed similar technologies and some may have also licensed parts or all of this compression technology.

Our Commercial Solutions segment provides various technologies that are utilized on mobile phones. Applications from competitors for location-based or text-based messaging platforms may be preloaded on mobile devices by original equipment manufacturers, or OEMs, or offered by OEMs directly. Increased competition from providers of location-based services which do not rely on a wireless carrier may result in fewer wireless carrier subscribers electing to purchase their wireless carrier’s branded location-based services, which could harm our business and revenue. In addition, these location-based or text-based services may be offered for free or on a onetime fee basis, which could force us to reduce monthly subscription fees or migrate to a onetime fee model to remain competitive. We may also lose end users or face erosion in our average revenue per user if these competitors deliver their products without charge to the consumer by generating revenue from advertising or as part of other applications or services.

Our expected growth and our financial position depends on, among other things, our ability to keep pace with such changes and developments and to respond to the increasing variety of electronic equipment users and transmission technologies. We may not have the financial or technological resources to keep pace with such changes and developments or be successful in our research and development and we may not be able to identify and respond to technological improvements made by our competitors in a timely or cost-effective fashion. Any delays could result in increased costs of development or redirect resources from other projects. In addition, we cannot provide assurances that the markets for our products, systems, services or technologies will develop as we currently anticipate. The failure of our products, systems, services or technologies to gain market acceptance could significantly reduce our net sales and harm our business.

Our business is highly competitive, we are reliant upon the success of our partners, and some of our competitors have significantly greater resources than we do, which could result in a loss of customers, market share and/or market acceptance.

Our business is highly competitive. We will continue to invest in research and development for the introduction of new and enhanced products and services designed to improve capacity, data processing rates and features. We must also continue to develop new features and to improve functionality of our software. Research and development in our industry is complex, expensive and uncertain. We believe that we must continue to dedicate a significant amount of resources to research and development efforts to maintain our competitive position. If we continue to expend a significant amount of resources on research and development, but our efforts do not lead to the successful introduction of product and service enhancements that are competitive in the marketplace, our business, results of operation and financial condition could be materially adversely affected.

Several of our potential competitors are substantially larger than we are and have greater financial, technical and marketing resources than we do. In particular, larger competitors have certain advantages over us which could cause us to lose customers and impede our ability to attract new customers, including: larger bases of financial, technical, marketing, personnel and other resources; more established relationships with wireless carriers and government customers; more funds to deploy products and services; and the ability to lower prices (or not charge any price) of competitive products and services because they are selling larger volumes. Furthermore, we cannot be sure that our competitors will not develop competing products, systems, services or technologies that gain market acceptance in advance of our products, systems, services or technologies, or that our competitors will not develop new products, systems, services or technologies that cause our existing products, systems, services or technologies to become non-competitive or obsolete, which could adversely affect our results of operations.

Our Commercial Solutions segment provides Safety and Security Technologies to various state and local municipalities and to a large extent, we are reliant on the success of our wireless partners and distributors to meet our growth objectives. In some cases, our wireless partners may have different objectives or our distributors may not be successful. For example, in February 2016, AT&T, one of our largest partners publicly announced a new nationwide service that is focused on the adoption of NG911 services and that such new service will be deployed in collaboration with a competitor. In fiscal 2018, we were informed by two of our large distributors that they did not win two large programs which included our NG911 solutions and that AT&T was awarded both programs. Going forward, we intend to continue to work with our partners and expand our direct and indirect sales and distribution channel in this area. If we are not successful in doing so, we may not be able to achieve our long-term business goals.

Contract cost growth on our fixed price contracts, including most of our government contracts, cost reimbursable type contracts and other contracts that cannot be justified as an increase in contract value due from customers exposes us to reduced profitability and the potential loss of future business and other risks.

A substantial portion of our products and services are sold under fixed-price contracts. Fixed-price contracts inherently have more risk than flexibly priced contracts. This means that we bear the risk of unanticipated technological, manufacturing, supply or other problems, price increases or other increases in the cost of performance. Future events could result in either upward or downward adjustments to those estimates which could negatively impact our profitability. Operating margin is materially adversely affected when contract costs that cannot be billed to the customer are incurred. This cost growth can occur if initial estimates used for calculating the contract price were incorrect, or if estimates to complete increase. To a lesser extent, we provide products and services under cost reimbursable type contracts which carry the entire burden of costs exceeding a negotiated contract ceiling price.

The cost estimation process requires significant judgment and expertise. Reasons for cost growth may include unavailability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance, availability and timing of funding from the customer, natural disasters, and the inability to recover any claims included in the estimates to complete. A significant change in an estimate on one or more programs could have a material adverse effect on our business, results of operation and financial condition.

Ongoing compliance with the provisions of securities laws, related regulations and financial reporting standards could unexpectedly materially increase our costs and compliance related expenses.

Because we are a publicly traded company, we are required to comply with provisions of securities laws, related regulations and financial reporting standards. Because securities laws, related regulations and financial reporting standards pertaining to our business are relatively complex, our business faces increased risks including the following:

If we identify a material weakness in the future, our costs may unexpectedly increase - Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and related SEC rules, we are required to furnish a report of management’s assessment of the effectiveness of our internal controls as part of our Annual Report on Form 10-K. Our independent registered public accountants are required to attest to and provide a separate opinion. To issue our report, we document our internal control design and the testing processes that support our evaluation and conclusion, and then we test and evaluate the results. There can be no assurance, however, that we will be able to remediate material weaknesses, if any, that may be identified in future periods, or maintain all of the controls necessary for continued compliance. There likewise can be no assurance that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies. ~~In fiscal~~

We acquired TCS on February 23, 2016 ~~we transitioned from~~and have integrated TCS into our existing internal controls over financial reporting. We continue to make changes and related enhancements to the ~~Committee~~TCS controls as part of ~~Sponsoring Organizations~~our evaluation of the ~~Treadway Commission ("COSO") 1992 Internal Control - Integrated Framework~~effectiveness of our internal controls over financial reporting. Although we do not expect to the COSO 2013 Internal Control - Integrated Framework. In accordance with the rules and regulations related to Sarbanes-Oxley Act of 2002, we are taking a one-year exemption related to the controls of TCS. We have begun the process of implementing new controls related to TCS, andexperience significant changes in ~~the future,~~internal control over financial reporting, we may identify significant deficiencies or material weaknesses and incur additional ~~costs.~~

costs in the future.

Stock-based compensation accounting standards could negatively impact our stock - Since our inception, we have used stock-based awards as a fundamental component of our employee compensation packages. We believe that stock-based awards directly motivate our employees to maximize long-term stockholder value and, through the use of long-term vesting, encourage employees to remain with us. We apply the provisions of Accounting Standards Codification ("ASC") 718, ~~"Compensation~~"Compensation - Stock Compensation," which requires us to record compensation expense in our statement of operations for employee and director stock-based awards using a fair value method. In the first quarter of fiscal 2018, we adopted FASB ASU No. 2016-09 which modified certain aspects of ASC 718, including the requirement to recognize excess tax benefits and shortfalls in the income statement. The ongoing application of this standard ~~has had~~will have a significant effect on our reported earnings, and could adversely impact our ability to provide accurate guidance on our future reported financial results due to the variability of the factors used to estimate the value of stock-based awards (including long-term performance shares which are subject to the achievement of three-year goals which are based on several performance metrics). The ongoing application of this standard could impact the future value of our common stock and may result in greater stock price volatility. To the extent that this accounting standard makes it less attractive to grant stock-based awards to employees, we may incur increased compensation costs, change our equity compensation strategy or find it difficult to attract, retain and motivate employees, each of which could have a material adverse effect on our business, results of operation and financial condition.

We must adopt new complex revenue recognition rules - The accounting rules and regulations that we must comply with are complex. Accounting rules and regulations are continually changing in ways that could materially impact our financial statements. The FASB has recently issued new guidance for revenue recognition. The new guidance replaces the prior revenue recognition guidance in its entirety. ~~Given the impact of our recent acquisition of TCS on February 23, 2016, we~~We have not yet selected a transition method and continue to evaluate the impact that this guidance will have on our business, results of operation and financial condition. This evaluation and the implementation must be completed by August 1, 2018 (our first quarter of fiscal 2019). Due to the complexity of the new standard and our organizational structure, we may not be able to complete such timely. Regardless of the transition method, the application of this new guidance may result in certain adjustments to our financial statements, which could have a material adverse effect on our net income. Because of the uncertainty of the estimates, judgments and assumptions associated with our accounting policies, we cannot provide any assurances that we will not make subsequent significant adjustments to our consolidated financial statements.

Changes in securities laws, regulations and financial reporting standards are increasing our costs - The Sarbanes-Oxley Act of 2002 required changes in some of our corporate governance, public disclosure and compliance practices. These changes have resulted in increased costs. The SEC has promulgated and proposed new rules on a variety of subjects including the requirement to use the interactive data format eXtensible Business Reporting Language (commonly referred to as "XBRL") in our financial statements, which we began including in our quarterly reports filed with the SEC in the first quarter of fiscal 2011, and the possibility that we would be required to adopt International Financial Reporting Standards ("IFRS"). In April 2016, as part of its Disclosure Effectiveness Initiative, the SEC published a concept release which considers various business and financial disclosures that public companies make in investor reports and seeks the public’s input on ways to further improve that disclosure. The issues raised by the SEC in the concept release have the potential to dramatically change the way in which companies prepare and deliver disclosure to investors and the burdens of preparing that disclosure. In August 2012, the SEC adopted new rules establishing additional disclosure, supply chain verification and reporting requirements regarding a public company's use of Conflict Minerals procured from Covered Countries (as both of those terms are defined by the SEC). These SEC rules and reporting requirements have resulted in us incurring additional costs to document and perform supplier due diligence. As these rules impact our suppliers, the availability of raw materials used in our operations could be negatively impacted and/or raw material prices could increase. Further, if we are unable to certify that our products are conflict free, we may face challenges with our customers, which could place us at a competitive disadvantage and could harm our reputation.

Our costs to comply with the aforementioned and other regulations continue to increase and we may have to add additional accounting staff, engage consultants or change our internal practices, standards and policies which could significantly increase our costs to comply with ongoing or future requirements. In addition, the NASDAQ Stock Market LLC ("NASDAQ") routinely changes its requirements for companies, such as us, that are listed on NASDAQ. These changes (and potential future changes) have increased and may increase our legal and financial compliance costs, including making it more difficult and more expensive for us to obtain director and officer liability insurance or maintain our current liability coverage. We believe that these new and proposed laws and regulations could make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our Audit Committee, and qualified executive officers.

Our backlog is subject to customer cancellation or modification and such cancellation could result in a decline in sales and increased provisions for excess and obsolete inventory.

We currently have a backlog of orders, mostly under contracts that our customers may modify or terminate. Almost all of the contracts in our backlog (including firm orders previously received from the U.S. government) are subject to cancellation at the convenience of the customer or for default in the event that we are unable to perform under the contract. A portion of our backlog is determined based on contracts received from our customers (such as the U.S. government and large telephone companies) and in certain cases, is computed by multiplying the most recent month’s contract or revenue by the months remaining under the existing long-term agreements, which we consider to be the best available information for anticipating revenue under those agreements. There can be no assurance that our backlog will result in actual revenue in any particular period, or at all, or that any contract included in backlog will be profitable. There is a higher degree of risk in this regard with respect to unfunded backlog. The actual receipt and timing of any revenue is subject to various contingencies, many of which are beyond our control. The actual receipt of revenue on contracts included in backlog may never occur or may change because a program schedule could change, the program could be canceled, a contract could be reduced, modified or terminated early, or an option that we had assumed would be exercised not being exercised.

A significant portion of the backlog from our U.S. commercial customers relates to large, multi-year contracts to provide state and local governments (and their agencies) with safety and security solutions. Although the contracts themselves represent legal, binding obligations of these governments, funding is often subject to the approval of budgets (for example, on an annual or bi-annual basis). Although funding for these multi-year contracts are dependent on future budgets being approved, we include the full estimated value of these large, multi-year contracts in our backlog given the critical nature of the services being provided and the positive historical experience of our state and local government customers passing their respective budgets.

We record a provision for excess and obsolete inventory based on historical and future usage trends and other factors, including the consideration of the amount of backlog we have on hand at any particular point in time. If orders in our backlog are canceled or modified, our estimates of future product demand may prove to be inaccurate, in which case we may have understated the provision required for excess and obsolete inventory. In the future, if we determine that our inventory is overvalued, we will be required to recognize such costs in our financial statements at the time of such determination. Any such charges could be materially adverse to our results of operations and financial condition.

We face a number of risks relating to the expected growth of our business. Our business and operating results may be negatively impacted if we are unable to manage this growth.

These risks include:

The loss of key technical or management personnel could adversely affect our business - Our future success depends on the continued contributions of key technical management personnel. Many of our key technical management personnel would be difficult to replace, and are not subject to employment or non-competition agreements. We currently have research and development employees in areas that are located a great distance away from our U.S. headquarters. Managing remote product development operations is difficult and we may not be able to manage the employees in these remote centers successfully. Our expected growth and future success will depend, in large part, upon our ability to attract and retain highly qualified engineering, sales and marketing personnel. Competition for such personnel from other companies, academic institutions, government entities and other organizations is intense. Although we believe that we have been successful to date in recruiting and retaining key personnel, we may not be successful in attracting and retaining the personnel we will need to grow and operate profitably. Also, the management skills that have been appropriate for us in the past may not continue to be appropriate if we grow and diversify.

We may not be able to improve our processes and systems to keep pace with anticipated growth - The future growth of our business may place significant demands on our managerial, operational and financial resources. In order to manage that growth, we must be prepared to improve and expand our management, operational and financial systems and controls. We also need to continue to recruit and retain personnel and train and manage our employee base. We must carefully manage research and development capabilities and production and inventory levels to meet product demand, new product introductions and product and technology transitions. If we are not able to timely and effectively manage our growth and maintain the quality standards required by our existing and potential customers, it could have a material adverse effect on our business, results of operation and financial condition.

Our markets are highly competitive and there can be no assurance that we can continue our success - The markets for our products are highly competitive. There can be no assurance that we will be able to continue to compete successfully or that our competitors will not develop new technologies and products that are more effective than our own. We expect the Department of Defense’s increased use of commercial off-the-shelf products and components in military equipment will encourage new competitors to enter the market. Also, although the implementation of advanced telecommunications services is in its early stages in many developing countries, we believe competition will continue to intensify as businesses and foreign governments realize the market potential of telecommunications services. Many of our competitors have financial, technical, marketing, sales and distribution resources greater than ours.

We may not be able to obtain sufficient components to meet expected demand - Our dependence on component availability, government furnished equipment, subcontractors and key suppliers, including the core manufacturing expertise of our high-volume technology manufacturing center located in Tempe, Arizona, exposes us to risk. Although we obtain certain components and subsystems from a single source or a limited number of sources, we believe that most components and subsystems are available from alternative suppliers and subcontractors. A significant interruption in the delivery of such items, however, could have a material adverse effect on our business, results of operation and financial condition. In addition, if our high-volume technology manufacturing center located in Tempe, Arizona is unable to produce sufficient product or maintain quality, it could have a material adverse effect on our business, results of operation and financial condition.

Our ability to maintain affordable credit insurance may become more difficult - In the normal course of our business, we purchase credit insurance to mitigate some of our domestic and international credit risk. Although credit insurance remains generally available, upon renewal, it may become more expensive to obtain or may not be available for existing or new customers in certain international markets and it might require higher deductibles than in the past. If we acquire a company with a different customer base, we may not be able to obtain credit insurance for those sales. As such, there can be no assurance that, in the future, we will be able to obtain credit insurance on a basis consistent with our past practices.

We rely upon various third party companies and their technology to provide services to our customers and if we are unable to obtain such services at reasonable prices, or at all, our gross margins and our ability to provide the services of our wireless applications business could be materially adversely affected.

Risks from our reliance with these third parties include:

The loss of mapping and third party content - The wireless data services provided to our customers are dependent on real-time, continuous feeds from map data, points of interest data, traffic information, gas prices, theater, event and weather information from vendors and others. Any disruption of this ~~third party~~third-party content from our satellite feeds or backup landline feeds or other disruption could result in delays in our subscribers’ ability to receive information. We obtain this data that we sell to our customers from companies owned by current and potential competitors, who may act in a manner that is not in our best interest. If our suppliers of this data or content were to enter into exclusive relationships with other providers of location-based services or were to discontinue providing such information and we were unable to replace them cost effectively, or at all, our ability to provide the services of our wireless applications business would be materially adversely affected. Our gross margins may also be materially adversely affected if the cost of third party data and content increases substantially.

Third party data centers or third party networks may fail - Many products and services of our advanced communication solutions, in particular our public safety and enterprise technology solutions, are provided through a combination of our servers, which we house at third party data centers, and the networks of our wireless carrier partners. As such, our business relies to a significant degree on the efficient and uninterrupted operation of the ~~third party~~third-party data centers we use. Our hosted data centers are currently located in third party facilities located in the Irvine and San Francisco, California areas, and we may use others as required. We also use third party data center facilities in the Phoenix, Arizona area to provide for disaster recovery. Network failures, disruptions or capacity constraints in our ~~third party~~third-party data center facilities or in our servers maintained at their location could affect the performance of the products and services of our wireless applications and 911 business and harm our reputation and our revenue. The ability of our subscribers to receive critical location and business information requires timely and uninterrupted connections with our wireless network carriers. Any disruption from our satellite feeds or backup landline feeds could also result in delays in our subscribers’ ability to receive information.

We must integrate our technologies and routinely upgrade them - We may not be able to upgrade our location-based services platform to support certain advanced features and functionality without obtaining technology licenses from third parties. Obtaining these licenses may be costly and may delay the introduction of such features and functionality, and these licenses may not be available on commercially favorable terms, or at all. Problems and delays in development or delivery as a result of issues with respect to design, technology, licensing and patent rights, labor, learning curve assumptions, or materials and components could prevent us from achieving contractual obligations. In addition, our products cannot be tested and proven in all situations and are otherwise subject to unforeseen problems. The inability to offer advanced features or functionality, or a delay in our ability to upgrade our location-based services platform, may materially adversely affect demand for our products and services and, consequently, have a material adverse effect on our business, results of operation and financial condition.

We rely upon “open-source” software - We have incorporated some types of ~~open source~~open-source software into our products, allowing us to enhance certain solutions without incurring substantial additional research and development costs. Thus far, we have encountered no unanticipated material problems arising from our use of ~~open source~~open-source software. However, as the use of ~~open source~~open-source software becomes more widespread, certain ~~open source~~open-source technology could become competitive with our proprietary technology, which could cause sales of our products to decline or force us to reduce the fees we charge for our products, which could have a material adverse effect on our business, results of operation and financial condition.

~~TCS is a party to lawsuits and other disputes related to intellectual property and contract obligations. The resolutions of these matters~~Indemnification provisions in our contracts could have a material adverse effect on our consolidated results of operations, financial position, or cash flows.

In the ordinary course of business, we include indemnification provisions in certain of our customer contracts. Pursuant to these agreements, we have agreed to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, including but not limited to losses related to third-party intellectual property claims. Some customers seek indemnification under their contractual arrangements with the Company for claims and other costs associated with defending lawsuits alleging infringement of patents through their use of our products and services, and the use of our products and services in combination with products and services of other vendors.

In some cases, we have agreed to assume the defense of the case. In others, the Company will negotiate with these customers in good faith because the Company believes its technology does not infringe the cited patents and due to specific clauses within the customer contractual arrangements that may or may not give rise to an indemnification obligation. It is not possible to determine the maximum potential amount the Company may spend under these agreements due to the unique facts and circumstances involved in each particular agreement.

For example, we have accrued certain costs related to Vehicle IP, LLC ("Vehicle IP") which filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware (the "District Court"). TCS is ~~currently~~defending our customer. Substantive settlement conversations have occurred but, to date, the parties have been unable to reach a party to a number of legal proceedings, including lawsuits relating to customers seeking indemnification under contractual arrangements for claims and other costs associated with defending lawsuits alleging infringement of patents through their use of our products and services, including in combination with products and services of other vendors. Our Consolidated Balance Sheet as of July 31, 2016 includes a $28.1 million liability, which represents the preliminary estimated fair value for pre-acquisition contingencies related to certain intellectual property legal proceedings and contractual obligations that existed as of the date of acquisition. These preliminary estimated fair values reflect market participant assumptions, as required by FASB ASC 805 "Business Combinations," and do not reflect our settlement position or amounts we actually may pay if an unfavorable resolution occurs.settlement. For additional information, see "Notes to Consolidated Financial Statements - Note (14)(b) Commitments and Contingencies - Legal Proceedings, ~~and~~ Other Matters and Final Settlements" included in "Part ~~II-Item~~II - Item 8.- Financial Statements and Supplementary Data," included in this Annual Report on Form 10-K.

The Company's assessments related to indemnification provisions are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions. Therefore, it is possible that an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company's consolidated financial statements in a future fiscal period.

We are, from time to time, and could become a party to additional litigation or subject to claims, including ~~patent infringement and~~ product liability claims, relating to our software, government investigations and other proceedings that could cause us to incur unanticipated expenses and otherwise have a material adverse effect on our business, results of operation and financial condition.

We are, from time to time, involved in commercial disputes and civil litigation relating to our businesses. Our agreements with customers may require us to indemnify such customers. Direct claims against us or claims against our customers may relate to ~~infringement of third party intellectual property rights,~~ defects in or non-conformance of our products, or our own acts of negligence and non-performance. Occasionally, we are called upon also to provide information in connection with litigation involving other parties or government investigations. Product liability and other forms of insurance are expensive and may not be available in the future. We cannot be sure that we will be able to maintain or obtain insurance coverage at acceptable costs or in sufficient amounts or that our insurer will not disclaim coverage as to a future claim. In many cases, we are unable to obtain insurance and are self-insured. Any such claim could have a material adverse effect on our business, results of operation and financial condition.

Because our software may contain defects or errors, and our hardware products may incorporate defective components, our sales could decrease if these defects or errors adversely affect our reputation or delay shipments of our products.

Products as complex as ours are likely to contain undetected errors or defects, especially when first introduced or when new versions are released. Our products may not be error or defect free after delivery to customers, which could damage our reputation, cause revenue losses, result in the rejection of our products or services, divert development resources and increase service and warranty costs, each of which could have a material adverse effect on our business, results of operation and financial condition.

Software products, such as our 911 call handling software solutions, must meet the stringent technical requirements of our customers and we must satisfy our warranty obligations to our customers. Our 911 call handling software product is a small product line, developed by TCS more than ten years ago and older versions of this software remain deployed by certain end-customers. In August 2016, AT&T, a distributor of athis small TCS product line ~~that we refer to as our 911 call handling software solution,~~ informed us that they do not believe we met certain contractual specifications related to performance and usability and has requested a refund of certain payments made by them. ~~In addition, AT&T has requested that we make certain changes to our 911 call handling software and provide those enhancements to them at no additional cost.~~

Our Consolidated Balance Sheet as of July 31, ~~2016~~2017 includes ~~a $7.2 million~~an estimate of our warranty liability ~~reflecting the preliminary estimated fair value of~~associated with this ~~contingent liability, as required by FASB ASC 805 "Business Combinations." The estimated fair value~~issue which was determined based on a review of contractual obligations, settlement discussions with AT&T and estimates of costs to enhance the software. We ~~do not anticipate deploying additional 911 call handling software solutions sold through AT&T until~~believe our customer support plan, which includes an intention to continue to support end-customers in exchange for an annual customer support fee, has mitigated the negative reputational impact of this ~~issue is resolved.~~issue. In fiscal ~~2016,~~2017, we ~~sold an aggregate of~~generated approximately ~~$4.5~~$5.5 million of ~~911 call handling software solutions,~~such fees, of which a ~~majority of which~~significant portion was derived from our relationship with AT&T. Sales in ~~our~~ fiscal ~~2017~~2018 for this product line are expected to be similar to what we achieved in fiscal ~~2016.~~2017. Although we expect to resolve this issue amicably with AT&T, we may not be able to do so.

Our hardware products are also subject to warranty obligations and integrate a wide variety of components from different vendors. We must quickly develop new products and product enhancements to keep pace with the rapidly changing software and telecommunications markets in which we operate.

Protection of our intellectual property is limited and pursuing infringers of our patents and other intellectual property rights can be costly.

Our businesses rely, in large part, upon our proprietary scientific and engineering know-how and production techniques. We rely on a combination of patent, copyright, trademark, service mark, trade secret and unfair competition laws, restrictions in licensing agreements, confidentiality provisions and various other contractual provisions to protect our intellectual property and related proprietary rights, but these legal means provide only limited protection. Although a number of patents have been issued to us and we have obtained a number of other patents as a result of our acquisitions, we cannot assure you that our issued patents will be upheld if challenged by another party. Additionally, with respect to any patent applications which we have filed, we cannot assure you that any patents will ~~issue~~be issued as a result of these applications.

The departure of any of our key management and technical personnel, the breach of their confidentiality and non-disclosure obligations to us or the failure to achieve our intellectual property objectives could have a material adverse effect on our business, results of operation and financial condition. Our ability to compete successfully and achieve future revenue growth will depend, in part, on our ability to protect our proprietary technology and operate without infringing upon the rights of others. We may fail to do so. In addition, the laws of certain countries in which our products are or may be sold may not protect our products or intellectual property rights to the same extent as the laws of the U.S.

Our ability to protect our intellectual property rights is also subject to the terms of future government contracts. We cannot assure you that the federal government will not demand greater intellectual property rights or restrict our ability to disseminate intellectual property. We are also a member of standards-setting organizations and have agreed to license some of our intellectual property to other members on fair and reasonable terms to the extent that the license is required to develop non-infringing products.

Pursuing infringers of our proprietary rights could result in significant litigation costs, and any failure to pursue infringers could result in our competitors utilizing our technology and offering similar products, potentially resulting in loss of a competitive advantage and decreased revenues. Despite our efforts to protect our proprietary rights, existing patent, copyright, trademark and trade secret laws afford only limited protection. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the U.S. Protecting our know-how is difficult especially after our employees or those of our ~~third party~~third-party contract service providers end their employment or engagement. Attempts may be made to copy or reverse-engineer aspects of our products or to obtain and use information that we regard as proprietary. Accordingly, we may not be able to prevent the misappropriation of our technology or prevent others from developing similar technology. Furthermore, policing the unauthorized use of our products is difficult and expensive. Litigation may be necessary in the future to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. The costs and diversion of resources could significantly harm our business. If we fail to protect our intellectual property, we may not receive any return on the resources expended to create the intellectual property or generate any competitive advantage based on it.

Third parties may claim we are infringing their intellectual property rights and we could be prevented from selling our products, or suffer significant litigation expense, even if these claims have no merit.

Our competitive position is driven in part by our intellectual property and other proprietary rights. Third parties, however, may claim that we, our products, operations or any products or technology we obtain from other parties are infringing their intellectual property rights, and we may be unaware of intellectual property rights of others that may cover some of our assets, technology and products. From time to time we receive letters from third parties who allege we are infringing their intellectual property and ask us to license such intellectual property. We review the merits of each such letter and respond as we deem appropriate.

From time to time our customers are parties to allegations of intellectual property infringement claims based on our customers’ incorporation and use of our products and services, which may lead to demands from our customers for us to indemnify them for costs in defending those allegations. Any litigation regarding patents, trademarks, copyrights or intellectual property rights, even those without merit, and the related indemnification demands of our customers, can be costly and time consuming, and divert our management and key personnel from operating our business. The complexity of the technology involved and inherent uncertainty and cost of intellectual property litigation increases our risks. If any third party has a meritorious or successful claim that we are infringing its intellectual property rights, we may be forced to change our products or enter into licensing arrangements with third parties, which may be costly or impractical. This also may require us to stop selling our products as currently engineered, which could harm our competitive position. We also may be subject to significant damages or injunctions that prevent the further development and sale of certain of our products or services and may result in a material loss of revenue.

From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their products. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. Some open source licenses contain requirements that we make available source code for modifications or derivative works under the terms of a particular open source license or other license granting third parties certain rights of further use. If we combine our proprietary software products with open source software in a certain manner, we could under certain of the open source licenses, be required to release our proprietary source code. Open source license terms may be ambiguous and many of the risks associated with usage of open source cannot be eliminated, and could if not properly addressed, negatively affect our business. If we were found to have inappropriately used open source software, we may be required to release our proprietary source code, re-engineer our products and client applications, discontinue the sale of our products or services in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could materially adversely affect our business, results of operation, and financial condition.

If our wireless carrier partners change the pricing and other terms by which they offer our products to their end-customers or do not continue to provide our services at all, our business, results of operation, and financial condition could be materially adversely affected. Additionally, potential future business combinations among wireless network operators could result in a loss of revenue for our business.

We generate a significant portion of our revenue from customers that are wireless carriers such as AT&T and Verizon. In addition, a portion of our revenue is derived from subscription fees that we receive from our wireless carrier partners for end users who subscribe to our service on a standalone basis or in a bundle with other services. To date, a relatively small number of end users have subscribed for our services in connection with their wireless plans compared to the total number of mobile phone users. Our future growth depends heavily on achieving significantly increased subscriber adoption of the wireless communication solutions we sell either through standalone subscriptions to our solutions or as part of bundles from our existing wireless carrier partners. Our success also depends on achieving widespread deployment of our solutions by attracting and retaining additional wireless carrier partners. Future revenue will depend on the pricing and quality of those services and subscriber demand for those services, which may vary by market, and the level of subscriber turnover experienced by our wireless carrier partners. If subscriber turnover increases more than we anticipate, our financial results could be materially adversely affected.

Poor performance in or disruptions of the services including in our advanced communication solutions could harm our reputation, delay market acceptance of our services and subject us to liabilities (including breach of contract claims brought by our customers and third-party damages claims brought by end-users). Our wireless carrier agreements and certain customers require us to meet specific requirements including operational uptime requirements or be subject to penalties.

If we are unable to meet contractual requirements with our wireless carrier partners, such as AT&T, they could terminate our agreements or we may be required to refund a portion of monthly subscriptions fees they have paid us.

Although we have a long history of providing services to many of our wireless carrier partners, from time to time, we routinely perform services without a multi-period contract while we negotiate new and extended contract terms and pricing. These negotiations are complex and may take long periods of time. Ultimately, if we are not successful in obtaining multi-period contract terms, or even a new contract, our revenues could be suddenly and materially reduced.

Competitors offer technology that has functionality similar to ours for free, under different business models. Competition from these free offerings may reduce our revenue and harm our business. If our wireless carrier partners can offer these location-based services to their subscribers for free, they may elect to cease their relationships with us, alter or reduce the manner or extent to which they market or offer our services or require us to substantially reduce our subscription fees or pursue other business strategies that may not prove successful for us and could have a material adverse effect on our business, results of operation and financial condition.

The telecommunications industry generally is currently undergoing a consolidation phase. Many of our customers, specifically wireless carrier customers of our Commercial Solutions segment, have or may become the target of acquisitions. If the number of our customers is significantly reduced as a result of this consolidation trend, or if the resulting companies do not utilize our product offerings, our business, results of operation and financial condition could be materially adversely affected.

Risks Related to our Common Stock

Our stock price is volatile.

The stock market in general and the stock prices of technology-based companies, in particular, experience extreme volatility that often is unrelated to the operating performance of any specific public company. The market price of our common stock has fluctuated significantly in the past and is likely to fluctuate significantly in the future as well. Factors that could have a significant impact on the market price of our stock include, among others:

our ability to successfully integrate TCS and manage our combined company;

strategic transactions, such as acquisitions and divestures;

issuance of potentially dilutive equity or equity-type securities;

issuance of debt;

future announcements concerning us or our competitors;

receipt or non-receipt of substantial orders for products and services;

quality deficiencies in services or products;

results of technological innovations;

new commercial products;

changes in recommendations of securities analysts;

government regulations;

changes in the status or outcome of government audits;

proprietary rights or product or patent litigation;

changes in U.S. government policies;

changes in economic conditions generally, particularly in the telecommunications sector;

changes in securities market conditions, generally;

changes in the status of litigation and legal matters (including changes in the status of export matters);

cyber-attacks;

energy blackouts;

acts of terrorism or war;

inflation or deflation; and

rumors or allegations regarding our financial disclosures or practices.

Shortfalls in our sales or earnings in any given period relative to the levels expected by securities analysts could immediately, significantly and adversely affect the trading price of our common stock.

Future issuances of our shares of common stock could dilute ~~your~~a stockholder's ownership interest in Comtech and reduce the market price of our shares of common stock.

In the future we may issue additional securities to raise capital. We may also acquire interests in other companies by using a combination of cash and our common stock or just our common stock. We may also issue securities convertible into our common stock. Any of these events may dilute ~~your~~a stockholder's ownership interest in Comtech and have an adverse impact on the price of our common stock.

Provisions in our corporate documents and Delaware law could delay or prevent a change in control of Comtech.

We have taken a number of actions that could have the effect of discouraging, delaying or preventing a merger or acquisition involving Comtech that our stockholders may consider favorable.

For example, we have a classified board and the employment contract with our President and CEO, and agreements with other of our executive officers, provide for substantial payments in certain circumstances or in the event of a change of control of Comtech. In the future, we may adopt a stockholder rights plan which could cause substantial dilution to a stockholder, and substantially increase the cost paid by a stockholder who attempts to acquire us on terms not approved by our Board of Directors.

In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, this statute provides that, except in certain limited circumstances, a corporation shall not engage in any "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

A "business combination" includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, for purposes of Section 203 of the Delaware General Corporation Law, an "interested stockholder" is a person who, together with affiliates, owns, or within three years did own, 15% or more of the corporation's voting stock. This provision could have the effect of delaying or preventing a change in control of Comtech.

A disruption in our dividend program could negatively impact our stock price.

~~Since September 2010, we~~We have paid quarterly dividends ~~pursuant to an annual targeted dividend amount established by our Board of Directors. The current annual targeted dividend for fiscal 2017 is $1.20 per common share.~~every quarter since September 2010.

~~Our dividend program requires the use of a portion of our cash flow.~~ Our ability to continue to pay quarterly dividends will depend on our ability to generate sufficient cash flows from operations in the future and maintain compliance with our Secured Credit ~~Facility.~~Facility, as amended. This ability may be subject to certain economic, financial, competitive and other factors that are beyond our control. ~~During the first quarter of fiscal 2017, our Board of Directors began further assessing our capital needs generally and the appropriate level of future dividends.~~ Future dividends ~~also~~ remain subject to compliance with financial covenants under the Company's Secured Credit Facility, as amended, as well as Board approval. Our Board of Directors may, at its discretion, decrease the targeted annual dividend amount or entirely discontinue the payment of dividends at any time.

Additionally, our ability to declare and pay dividends and make other distributions with respect to our capital stock may also be restricted by the terms of our Secured Credit Facility, as amended, and may be restricted by the terms of financing arrangements that we enter into in the future.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Historically, we have not owned any material properties or facilities and have relied upon a strategy of leasing. The following table lists our primary leased facilities at July 31, ~~2016:~~

2017:



Location		Property Type	Square Footage	Lease Expiration
Commercial Solutions Segment
Tempe, Arizona	(A)	Manufacturing ~~Complex~~and Engineering	~~169,000~~161,000	February 2021
Phoenix, Arizona	(B)	General office (currently vacated)	75,000	October 2018
Seattle, Washington	(C)	Network Operations, R&D, Engineering and Sales	~~64,000~~57,000	~~September 2017~~December 2022
Santa Clara, California	(D)	Manufacturing and Engineering	47,000	April 2019
Various facilities	(E)	~~Manufacturing,~~ Engineering and General Office	~~43,000~~35,000	Various
Aliso Viejo, California	(F)	R&D and Engineering	29,000	December 2017
Greenwood Village, Colorado	(F)	Network Operations	17,000	July 2020
Moscow, Idaho	(G)	Support, Engineering and Sales	13,000	February 2020
Annapolis, Maryland	(F)	Support, Engineering and Sales	12,000	July 2019
Fremont, California	(G)	Support, Engineering and Sales	10,000	April ~~2017~~2020
Germantown, Maryland	(H)	Engineering and General Office	6,000	May 2025
			~~485,000~~462,000
Government Solutions Segment
Orlando, Florida	(I)	Manufacturing and Engineering	99,000	April 2026
Tampa, Florida	(F)	Manufacturing	46,000	April 2022
Melville, New York	(J)	Manufacturing and Engineering	45,000	December 2021
~~Hanover, Maryland~~	~~(F)~~	~~General office (currently vacated)~~	~~36,000~~	~~August 2017~~
Torrance, California	(F)	Support, Engineering and Sales	35,000	January 2018
Germantown, Maryland	(H)	Engineering and General Office	26,000	May 2025
Various facilities	(K)	Support, Engineering and Sales	14,000	Various
Richardson, Texas	(F)	R&D and Engineering	13,000	July 2020
Annapolis, Maryland	(F)	Support, Engineering and Sales	12,000	July 2019
Manassas, Virginia	(F)	Support, Engineering and Sales	11,000	November 2017
			~~337,000~~301,000
Corporate
Annapolis, Maryland	(F)	General Office and common areas	19,000	July 2019
Melville, New York	(L)	Corporate headquarters and general office	9,600	~~October 2016~~August 2027
			28,600

Total Square Footage			~~850,600~~791,600

(A)

Although primarily used for our satellite earth station product lines, which are part of the Commercial Solutions segment, both of our business segments utilize, from time to time, our high-volume technology manufacturing facilities located in Tempe, Arizona. These manufacturing facilities utilize state-of-the-art design and production techniques, including analog, digital and RF microwave production, hardware assembly and full service engineering. Our leases for these facilities expire from fiscal ~~2017~~2018 through fiscal 2021. We have the option to extend the lease terms for up to an additional five-year period.

(B)

As a result of the August 1, 2008 Radyne acquisition, we also assumed a lease of building space in Phoenix, Arizona that was previously used for manufacturing. In connection with our ~~Radyne-acquisition~~fiscal 2009 Radyne acquisition restructuring plan, we vacated and subleased this space through October 2015. We are currently seeking to sublease this ~~building space to another third party.~~space.


(C)	Our office in Seattle, Washington is used primarily for servicing and hosting our wireless and VoIP E9-1-1 public safety support services.


(D)	Our Commercial Solutions segment manufactures our traveling wave tube amplifiers in a leased manufacturing facility located in Santa Clara, California. Our Commercial Solutions segment also operates a small office in the United Kingdom with a lease that expires in October ~~2016.~~2021.

(E)

Our Commercial Solutions segment also leases an additional ~~thirteen~~twelve facilities, ~~four~~three of which are located in the U.S. The U.S. facilities aggregate ~~15,000~~7,000 square feet and are primarily utilized for ~~manufacturing,~~ engineering and general office use. Our Commercial Solutions segment also operates nine small offices in Brazil, Canada, China, India, Singapore, Australia and the United Kingdom, all of which aggregate 28,000 square feet and are primarily utilized for customer support, engineering and sales.

(F)

~~As a result of the February 23, 2016 TCS acquisition, we acquired~~We have leases for facilities in Annapolis, Maryland, Aliso Viejo, California, and Greenwood Village, Colorado used primarily for the design and development of our software based systems and ~~applications.~~applications and network operations. Major manufacturing and engineering facilities for our Government Solutions segment are in Tampa, Florida, Torrance, California, Richardson, Texas and Manassas, Virginia. ~~The Company also acquired a lease for a facility in Hanover, Maryland which is vacated.~~ We are currently ~~looking~~finalizing plans to ~~sublease this space~~move our Aliso Viejo, California and Torrance, California office facilities to ~~a third party.~~new facilities when the current leases expire. In addition, we are in the process of closing our Manassas, Virginia facility.


(G)	Our offices in Moscow, Idaho and Fremont, California are primarily used for research and development, engineering and sales of our satellite earth station products.


(H)	Our Government Solutions segment leases a 32,000 square foot facility located in Germantown, Maryland which is primarily used for BFT-1 sustainment activities, engineering and general office use. Our Government Solutions segment occupies 26,000 feet of the facility with the remainder utilized by our Commercial Solutions segment.


(I)	Our Government Solutions segment manufactures our over-the-horizon microwave systems in a leased facility in Orlando, Florida. This business also leases a small office in North Africa.

(J)

Our Government Solutions segment manufactures our solid-state, high-power, broadband amplifiers in ana 45,000 square foot engineering and manufacturing facility on more than two acres of land in Melville, New York and an 8,000 square foot facility in Topsfield, Massachusetts. We lease the New York facility from a partnership controlled by our President and CEO. The lease provides for our use of the premises as they exist through December 2021 with an option to renew for an additional ten-year period. We have a right of first refusal in the event of a sale of the facility. Our ~~Topsfield~~Massachusetts lease is currently on a month-to-month basis.


(K)	Our Government Solutions segment also leases an additional four facilities located in the U.S. that are primarily used for engineering, sales and software development. Our leases for these facilities expire from fiscal 2018 through fiscal 2021.


(L)	Our corporate headquarters are located in an office building complex in Melville, New York. The lease provides for our use of the premises through ~~October 2016. We are currently in the process of negotiating with the landlord for a lease extension and expect to execute a new lease agreement shortly on terms similar to our current lease.~~August 2027.

The terms for all of our leased facilities are generally for multi-year periods and we believe that we will be able to renew these leases or find comparable facilities elsewhere.

ITEM 3. LEGAL PROCEEDINGS

Information regarding legal proceedings is incorporated herein by reference to the "Notes to Consolidated Financial Statements – Note (14)(b) Commitments and Contingencies – Legal Proceedings, ~~and~~ Other Matters and Final Settlements" included in "Part ~~II—~~II - Item ~~8.—~~8.- Financial Statements and Supplementary Data," included in this Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stock Performance Graph and Cumulative Total Return

The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P’s 500 Index and the NASDAQ Telecommunications Index for each of the last five fiscal years ended July 31, assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends. The comparisons in the graphs below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock.

Our common stock trades on the NASDAQ Stock Market LLC ("NASDAQ") under the symbol "CMTL."

4344

The following table shows the quarterly range of the high and low sale prices for our common stock as reported by the NASDAQ. Such prices do not include retail markups, markdowns or commissions.


	Common Stock			Common Stock
	High		Low
Fiscal Year Ended July 31, 2015
First Quarter	$	39.42	32.09
Second Quarter	40.69		30.02
Third Quarter	36.28		26.30
Fourth Quarter	32.13		27.34
				High		Low
Fiscal Year Ended July 31, 2016
First Quarter	$	29.31	20.30	$	29.31	20.30
Second Quarter	25.85		17.27	25.85		17.27
Third Quarter	25.09		18.01	25.09		18.01
Fourth Quarter	24.93		11.24	24.93		11.24

Fiscal Year Ended July 31, 2017
First Quarter				$	13.84	9.84
Second Quarter				12.81		9.52
Third Quarter				15.25		10.53
Fourth Quarter				19.80		13.75

FASB ASU No. ~~2015-17~~2017-04, which ~~requires~~simplifies the measurement of goodwill impairment by eliminating Step Two from the goodwill impairment test. Instead, impairment will be measured using the excess amount that ~~deferred tax assets and liabilities be classified as non-current in~~ a ~~statement~~reporting unit's carrying value exceeds its fair value; however, any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Our early adoption of this ASU did not have any impact on our consolidated financial ~~position. As discussed further in Note (10) - "Income Taxes~~," we adopted this FASB ASU prospectively on August 1, 2015 and reclassified our net deferred tax assets and liabilities to the net non-current deferred tax liability in our Consolidated Balance Sheet as of July 31, 2016. No prior periods were retrospectively adjusted.statements or disclosures.

In addition, the following FASB ASUs have been issued and incorporated into the FASB ASC and have not yet been adopted by us as of July 31, ~~2016:~~2017:

FASB ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)," issued in May 2014, which replaces numerous requirements in U.S. GAAP, including industry specific requirements, and provides a single revenue recognition model for contracts with customers. The core principle of the new standard is that a company should record revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, FASB ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" was issued to defer the effective date of FASB ASU No. 2014-09 by one year. As a result, FASB ASU No. 2014-09 is effective for ~~annual reporting periods~~fiscal years beginning after December 15, 2017 ~~including interim reporting periods within that reporting period~~ (our fiscal year beginning on August 1, 2018), including interim reporting periods within those fiscal years and can be adopted either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period (our fiscal year beginning on August 1, 2017). We are evaluating which transition approach to use and the impact of this FASB ASU on our consolidated financial statements, including financial reporting and disclosures.

FASB ASU No. 2014-12, issued in June 2014, which requires that a performance target which affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award at the grant date. This FASB ASU is effective in our first quarter of fiscal 2017, and can be adopted either (a) prospectively to all awards granted or modified after the effective date, or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. As we currently do not have share-based awards outstanding with a performance target that could be achieved after the requisite service period, we do not expect this FASB ASU to impact our consolidated financial statements or disclosures upon adoption.

FASB ASU No. 2014-15, issued in August 2014, which provides guidance about management's responsibility to evaluate whether there is a substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. This FASB ASU is effective for the annual period ending after December 15, 2016 (our fiscal year ending on July 31, 2017). Early adoption is permitted. As we currently do not believe that there is a substantial doubt about our ability to continue as a going concern, we do not expect this FASB ASU to impact our consolidated financial statements or disclosures upon adoption.

FASB ASU No. 2015-11, issued in July 2015, which simplifies the guidance on the subsequent measurement of inventory other than inventory measured using the last-in, first out or the retail inventory method. This FASB ASU requires in-scope inventory to be subsequently measured at the lower of cost and net realizable value, the latter of which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This FASB ASU is effective for fiscal years beginning after December 15, 2016 ~~including interim periods within those fiscal years~~ (our fiscal year beginning on August 1, 2017), including interim reporting periods within those fiscal years. In March 2016, April 2016, May 2016 and ~~should be applied prospectively~~February 2017, FASB ASU Nos. 2016-08 "Revenue from Contracts with ~~earlier adoption permitted as~~Customers (Topic 606): Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)," 2016-10 "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," 2016-12 "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients" and 2017-05 "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets" were issued, respectively, to clarify certain implementation matters related to the new revenue standard. The effective dates for these ASUs coincide with the effective date of FASB ASU 2014-09. Because of the ~~beginning~~broad scope of ~~an interim or annual reporting period.~~this new standard, it could impact our net sales and operating income across our two operating segments as well as related business processes and IT systems. We ~~are evaluating~~have formed a project team to perform a detailed evaluation of the operational impact of this ~~FASB~~new ASU, which transition approach to use and the overall impact of these ASUs on our consolidated financial ~~statements.~~statements and disclosures. This evaluation is ongoing and is expected to be completed shortly before our first quarter of fiscal 2019.

FASB ASU No. 2016-01, issued January 2016, ~~is an update to FASB ASC 825 "Financial Instruments"~~which addresses certain aspects of recognition, measurement, presentation and ~~changes~~disclosure of financial instruments, such as: amending the ~~treatment~~initial and subsequent measurement requirements for ~~available for sale~~certain equity investments by recognizing unrealized fair value changes directly in net income, and no longer in other comprehensive income. In addition, the impairment assessment of equity securities without readily determinable fair values is simplified by allowing a qualitative assessment. The FASB ASU eliminatesinvestments; eliminating the disclosure ~~requirement of~~requirements related to the methods and significant assumptions used to estimate the fair value ~~for~~of financial instruments measured at amortized cost on the balance ~~sheet. Additional~~sheet; requiring the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and requiring separate presentation of financial assets and financial liabilities by measurement category and form ~~is also required.~~of financial asset or liability on the balance sheet or the accompanying notes to the financial statements. This ~~FASB~~ ASU is effective for fiscal years beginning after December 15, 2017 (our fiscal year beginning on August 1, 2018), including interim periods within those fiscal years and should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of ~~adoption. Early~~ adoption, ofexcept for the provisions ~~affecting us~~related to equity securities without readily determinable fair values which are to be adopted prospectively. Under certain circumstances, early adoption is ~~not~~ permitted. ~~As we currently do not hold investments in available for sale securities, we do not expect~~We are evaluating the impact of this ~~FASB~~ ASU ~~to impact~~on our consolidated financial statements ~~or disclosures upon adoption.~~and disclosures.

FASB ASU No. 2016-02, issued in February 2016, which requires lessees to recognize the following for all leases (with the exception of short-term leases): (i) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, initially measured at the present value of the lease payments; and (ii) a right-of-use asset, which is an asset that represents the lessee's right to use a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This ~~FASB~~ ASU is effective for fiscal years beginning after December 15, 2018 (our fiscal year beginning on August 1, 2019), including interim periods within those fiscal years ~~(our fiscal year beginning in August 1, 2019)~~ and should be applied with a modified retrospective ~~approach with early~~approach. Early adoption is permitted. We are evaluating the impact of this ~~FASB~~ ASU on our consolidated financial statements and or disclosures.

FASB ASU No. 2016-09, issued in March 2016, which ~~relates to~~amends several aspects of the accounting for ~~forfeitures, employer tax withholding on~~and reporting of share-based ~~compensation and~~payment transactions, including: the ~~financial statement presentation~~recognition of excess tax benefits ~~or deficiencies. This FASB ASU also clarifies~~and shortfalls in the income statement; the classification of excess tax benefits as an operating activity in the statement of cash ~~flows presentation~~flows; the timing of recognizing forfeitures; permitting the withholding of statutory taxes up to the maximum rate in the applicable jurisdictions; and the classification of cash paid by an employer, when withholding shares for ~~certain components of share-based awards.~~tax withholdings, as a financing activity. The amendments related to this ASU are effective ~~date~~ for ~~the standard is for interim and annual reporting periods~~fiscal years beginning after December 15, 2016 (our fiscal year beginning on August 1, 2017)~~. Early adoption is permitted. We are currently assessing the timing of~~, and interim periods within those fiscal years and should be applied either retrospectively or prospectively, as applicable. Our adoption of this ~~FASB~~ ASU, ~~and the~~on August 1, 2017, did not have a material impact ~~it will have~~ on our consolidated financial statements and ~~related disclosures.~~

~~FASB ASU No. 2016-10, issued~~the changes in ~~April 2016, clarifies revenue recognition under ASUs No. 2014-09 and No. 2015-14 specifically as it pertains to identifying performance obligations and licensing implementation. The effective date for~~presentation required by this ASU ~~coincides with the effective date of FASB ASU 2014-09 which is effective~~will be reflected commencing in fiscal 2018. See "Notes to Consolidated Financial Statements – Note (11) Stock-Based Compensation" included in "Part II - Item 8. - Financial Statements and Supplementary Data" for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period (our fiscal year beginning on August 1, 2018), and can be adopted either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption. Earlyfurther information regarding our adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period (our fiscal year beginning on August 1, 2017). We are evaluating which transition approach to use and the impact of this ~~FASB ASU on our consolidated financial statements, including financial reporting and disclosures.~~ASU.

FASB ASU No. 2016-12, issued in May 2016, clarifies certain aspects of ASUs No. 2014-09 and No. 2015-14. The effective date for this ASU coincides with the effective date of FASB ASU 2014-09 which is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period (our fiscal year beginning on August 1, 2018), and can be adopted either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period (our fiscal year beginning on August 1, 2017). We are evaluating which transition approach to use and the impact of this FASB ASU on our consolidated financial statements, including financial reporting and disclosures.

FASB ASU No. 2016-13, issued in June 2016, which requires the measurement of ~~all~~ expected credit losses for financial assets held at the reporting date to be based on historical experience, current conditions and reasonable and supportable forecasts. This ASU is effective for fiscal years beginning after December 15, 2019 (our fiscal year beginning on August 1, 2020), including interim periods within those fiscal years. All entities may adopt the amendments in this ASU earlier as of the fiscal years ~~(our~~beginning after December 15, 2018, including interim periods within those fiscal ~~year~~years. Except for a prospective transition approach required for debt securities for which an other-than-temporary impairment had been recognized before the effective date, an entity will apply the amendments in this ASU through a cumulative-effect adjustment to retained earnings as of the beginning ~~August 1, 2020). Early adoption~~of the first reporting period in which the guidance is ~~permitted.~~effective (that is, on a modified-retrospective approach). We are evaluating the impact of this ~~FASB~~ ASU on our consolidated financial ~~statements.~~statements and disclosures.

FASB ASU No. 2016-15, issued in August 2016, which ~~will make eight targeted changes~~amends the guidance on the following cash flow related issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon and similar type debt instruments; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims (including those related to ~~how~~certain life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and cash receipts ~~and cash~~or payments ~~are presented and classified in the statement~~with more than one class of cash flows. This ~~FASB~~ ASU is effective for fiscal years beginning after December 15, 2017 (our fiscal year beginning on August 1, ~~2018.) This FASB ASU will require~~2018), and interim periods within those fiscal years and shall be applied using the retrospective transition method to each period presented. Early adoption ~~on a retrospective basis unless it~~ is ~~impracticable to apply, in which case we would be required to apply~~permitted; however, all of the amendments ~~prospectively as of~~must be adopted in the ~~earliest date practicable.~~same period. We are evaluating the impact of this ~~FASB~~ ASU on our consolidated financial ~~statements.~~statements and disclosures.

FASB ASU No. 2016-16, issued in October 2016, which eliminates a prior exception and now requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory (for example, intellectual property and property, plant and equipment) when the transfer occurs. This ASU is effective for fiscal years beginning after December 15, 2017 (our fiscal year beginning on August 1, 2018), and interim periods within those fiscal years and shall be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. We are evaluating the impact of this ASU on our consolidated financial statements and disclosures.

FASB ASU No. 2017-09, issued in May 2017, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. This ASU is effective for fiscal years beginning after December 15, 2017 (our fiscal year beginning on August 1, 2018) and early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This ASU should be applied prospectively to an award modified on or after the adoption date of this ASU. We are evaluating the impact of this ASU on our consolidated financial statements and disclosures.

FASB ASU No. 2017-11, issued in July 2017, which provides guidance on the accounting for certain financial instruments with embedded features that result in the strike price of the instrument or embedded conversion option being reduced on the basis of the pricing of future equity offerings (commonly referred to as "down round" features). This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 (our fiscal year beginning on August 1, 2019) and early adoption is permitted, including adoption in an interim period. This ASU should be applied retrospectively in accordance with the provisions of the ASU. We are evaluating the impact of this ASU on our consolidated financial statements and disclosures.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our earnings and cash flows are subject to fluctuations due to changes in interest rates primarily from borrowings under our Secured Credit ~~Facility.~~Facility, as amended. Based on the amount of outstanding debt under our Secured Credit Facility, as amended, a hypothetical change in interest rates by 10% would change interest expense by ~~$1.1~~$0.8 million over a one-year period. ~~Under our current policies,~~Although we do not currently use interest rate derivative instruments to manage exposure to interest rate ~~changes. We~~changes, we may choose to do so in the future in connection with our Secured Credit Facility, ~~revise this policy.~~as amended.

Our earnings and cash flows are also subject to fluctuations due to changes in interest rates on our investment of available cash balances. As of July 31, ~~2016,~~2017, we had cash and cash equivalents of ~~$66.8~~$41.8 million, which consisted of cash and highly-liquid money market ~~mutual funds, certificates of~~ deposit ~~and bank deposits.~~accounts. Many of these investments are subject to fluctuations in interest rates, which could impact our results. Based on our investment portfolio balance as of July 31, ~~2016,~~2017, a hypothetical change in interest rates of 10% would have a nominal impact on interest income over a one-year period. Ultimately, the availability of our cash and cash equivalents is dependent on a well-functioning liquid market.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reports of Independent Registered Public Accounting Firm, Consolidated Financial Statements, Notes to Consolidated Financial Statements and Related Financial Schedule are listed in the Index to Consolidated Financial Statements and Schedule annexed hereto.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was carried out by us under the supervision and with the participation of our management, including our President, ~~CEO~~Chief Executive Officer and Chairman and Chief Financial Officer. ~~Except for the exclusion of the disclosure controls and procedures relating to TeleCommunication Systems, Inc. ("TCS"), as further noted below, based~~Based on that evaluation, our President, ~~CEO~~Chief Executive Officer and Chairman and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by the report to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required disclosure. A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of July 31, ~~2016~~.2017. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control – Integrated Framework (2013). Based on our assessment, we determined that, as of July 31, ~~2016,~~2017, our internal control over financial reporting was effective based on those criteria.

We acquired TeleCommunication Systems, Inc. ("TCS") on February 23, 2016. TCS has been excluded from our assessment of internal controls over financial reporting as of July 31, 2016. TCS’s assets were $591.5 million and net sales were $151.4 million as of and for the approximate five month period ended July 31, 2016.

Deloitte and Touche LLP, our independent registered public accounting firm, has performed an audit of our internal control over financial reporting as of July 31, ~~2016~~2017 based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO. This audit is required to be performed in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our independent auditors were given unrestricted access to all financial records and related data. Deloitte’s audit reports appear on pages F-2 and F-3 of this annual report.

Changes In Internal Control Over Financial Reporting

~~There~~We acquired TeleCommunication Systems, Inc. ("TCS") on February 23, 2016 and have integrated TCS into our existing internal controls over financial reporting. Except for any changes and related enhancements in internal controls related to TCS, there have been no changes in our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act that occurred during our fiscal quarter ended July 31, ~~2016~~,2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

7176

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Certain information concerning directors and officers is incorporated by reference to our Proxy Statement for the Annual Meeting of Stockholders (the "Proxy Statement") which will be filed with the Securities and Exchange Commission no more than 120 days after the close of our fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

Information regarding executive compensation is incorporated by reference to the Proxy Statement, which will be filed with the Securities and Exchange Commission no more than 120 days after the close of our fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding securities authorized for issuance under equity compensation plans and certain information regarding security ownership of certain beneficial owners and management is incorporated by reference to the Proxy Statement, which will be filed with the Securities and Exchange Commission no more than 120 days after the close of our fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

Information regarding certain relationships and related transactions is incorporated by reference to the Proxy Statement, which will be filed with the Securities and Exchange Commission no more than 120 days after the close of our fiscal year.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information regarding principal accountant fees and services is incorporated by reference to the Proxy Statement, which will be filed with the Securities and Exchange Commission no more than 120 days after the close of our fiscal year.

7277

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES



(a)		(1) The Registrant’s financial statements together with a separate index are annexed hereto.
		(2) The Financial Statement Schedule listed in a separate index is annexed hereto.
		(3) Exhibits required by Item 601 of Regulation S-K are listed below.



Exhibit Number	Description of Exhibit	Incorporated By Reference to Exhibit
3(a)(i)	Restated Certificate of Incorporation of the Registrant	Exhibit 3(a)(i) to the Registrant’s 2006 Form 10-K
3(a)(ii)	~~Second~~Third Amended and Restated By-Laws of the Registrant, as of September 26, 2017
10(a)(1)*	Sixth Amended and Restated Employment Agreement, dated November 18, 2016, between the Registrant and Fred Kornberg	Exhibit ~~3(ii)~~10.1 to the Registrant’s Form ~~8-K dated January 18, 2012~~10-Q, filed December 7, 2016
10(a)(2)*	~~Fifth~~Amendment to Sixth Amended and Restated Employment Agreement, dated ~~December 22, 2014,~~June 6, 2017, between the Registrant and Fred Kornberg	Exhibit ~~10.2~~10.7 to the Registrant’s Form ~~10-Q~~8-K, filed ~~March 11, 2015~~June 7, 2017
~~10(b)~~ 10(a)(3)*	Lease agreement, dated September 23, 2011, on the Melville, New York Facility	Exhibit 10(s) to the Registrant's 2011 Form 10-K
10(b)*	2001 Employee Stock Purchase Plan	Appendix B to the Registrant’s Proxy Statement, filed November 3, 2000
10(c)*	2000 Stock Incentive Plan, Amended and Restated, Effective November 18, 2016	Appendix A to the Registrant’s Proxy Statement, filed November 21, 2016
10(d)(1)*	Form of Stock Option Agreement pursuant to the 2000 Stock Incentive Plan	Exhibit 10(f)(7) to the Registrant’s 2005 Form 10-K
~~10(c)~~ 10(d)(2)*	Form of Stock Option Agreement for Non-employee Directors pursuant to the 2000 Stock Incentive Plan	Exhibit 10(f)(8) to the Registrant’s 2006 Form 10-K
~~10(d)~~ 10(e)(1)*	~~2001 Employee Stock Purchase Plan~~	~~Appendix B to the Registrant’s Proxy Statement dated November 6, 2000~~
10(e)*	~~Lease agreement dated September 23, 2011 on the Melville, New York Facility~~	~~Exhibit 10(s) to the Registrant's 2011 Form 10-K~~
10(f)*	~~Form of Indemnification Agreement between the Registrant and the Named Executive Officers and Certain Other Executive Officers~~	~~Exhibit 10.1 to Registrant’s Form 8-K filed on March 8, 2007~~
10(g)*	~~Form of Stock Unit Agreement for Non-employee Directors pursuant to the 2000 Stock Incentive Plan~~	~~Exhibit 10.1 to the Registrant's Form 10-Q filed June 7, 2012~~
10(h)*	~~Form of Restricted Stock Unit Agreement for Non-employee Directors pursuant to the 2000 Stock Incentive Plan~~	~~Exhibit 10.2 to the Registrant's Form 10-Q filed June 7, 2012~~
10(i)*	Form of Performance Share Agreement pursuant to the 2000 Stock Incentive Plan	Exhibit 10(s) to the Registrant’s 2012 Form 10-K
~~10(j)~~ 10(e)(2)*	~~2000 Stock Incentive Plan, Amended and Restated, Effective December 10, 2015~~	~~Exhibit 10.1 to the Registrant's Form 10-Q filed March 10, 2016~~
10(k)*	Form of ~~Stock Unit~~Performance Share Agreement (eligible for dividend equivalents) ~~for Non-employee Directors~~(Auto Deferral) pursuant to the 2000 Stock Incentive Plan	Exhibit ~~10(v)~~10(z) to the Registrant's 2013 Form 10-K
~~10(l)~~ 10(e)(3)*	Form of Performance Share Agreement (eligible for dividend equivalents) (Elective Deferral) pursuant to the 2000 Stock Incentive Plan	Exhibit 10(aa) to the Registrant's 2013 Form 10-K
10(f)(1)*	Form of Long-Term Performance Share Award Agreement pursuant to the 2000 Stock Incentive Plan - 2014	Exhibit 10(ab) to the Registrant's 2014 Form 10-K
10(f)(2)*	Form of Long-Term Performance Share Award Agreement pursuant to the 2000 Stock Incentive Plan - 2017	Exhibit 10.8 to the Registrant's Form 8-K, filed June 7, 2017
10(g)(1)*	Form of Restricted Stock ~~Unit~~ Agreement for Employees pursuant to the 2000 Stock Incentive Plan ~~- 2013~~	Exhibit ~~10(w)~~10(y) to the ~~Registrant's 2013~~Registrant’s 2016 Form 10-K
10(m)*	~~Form of Restricted Stock Unit Agreement (eligible for dividend equivalents) for Non-employee Directors pursuant to the 2000 Stock Incentive Plan - 2013~~	~~Exhibit 10(x) to the Registrant's 2013 Form 10-K~~

7378



Exhibit Number	Description of Exhibit	Incorporated By Reference to Exhibit
~~10(n)~~ 10(g)(2)*	Form of Restricted Stock Agreement for Non-employee Directors pursuant to the 2000 Stock Incentive Plan ~~- 2013~~	~~Exhibit 10(y) to the Registrant's 2013 Form 10-K~~
10(o)*	~~Form of Performance Share Agreement (eligible for dividend equivalents) (Auto Deferral) pursuant to the 2000 Stock Incentive Plan~~	~~Exhibit 10(z) to the Registrant's 2013 Form 10-K~~
10(p)*	~~Form of Performance Share Agreement (eligible for dividend equivalents) (Elective Deferral) pursuant to the 2000 Stock Incentive Plan~~	~~Exhibit 10(aa) to the Registrant's 2013 Form 10-K~~
10(q)*	~~Form of Long-Term Performance Share Award Agreement pursuant to the 2000 Stock Incentive Plan - 2013~~	Exhibit 10(ab) to the ~~Registrant's 2013~~Registrant’s 2016 Form 10-K
10(r)*	~~Form of Share Unit Agreement (eligible for dividend equivalents) for Employees pursuant to the 2000 Stock Incentive Plan~~	~~Exhibit 10.2 to the Registrant's Form 10-Q filed December 9, 2013~~
10(s)*	~~Form of Long-Term Performance Share Award Agreement pursuant to the 2000 Stock Incentive Plan - 2014~~	~~Exhibit 10(ab) to the Registrant's 2014 Form 10-K~~
~~10(t)~~10(h)(1)*	~~Form of Change in Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO) and Certain Other Executive Officers~~	~~Exhibit 10(ac)(1) to the Registrant's 2014 Form 10-K~~
10(t)(2)*	~~Form of Change in Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO) and Certain Other Executive Officers (California Employees)~~	~~Exhibit 10(ac)(2) to the Registrant's 2014 Form 10-K~~
10(t)(3)*	~~Form of Change in Control Agreement (Tier 3) between the Registrant and Certain Non-Executive Officers~~	~~Exhibit 10(ac)(3) to the Registrant's 2014 Form 10-K~~
10(u)*	~~Retention Agreement dated January 12, 2015, between the Registrant and Robert Rouse~~	~~Exhibit 10.3 to the Registrant’s Form 10-Q filed March 11, 2015~~
10(v)*	~~Consulting Agreement with Robert McCollum dated July 23, 2015~~	~~Exhibit 10(af) to the Registrant's 2015 Form 10-K~~
10(w)*	~~Agreement and Plan of Merger, dated as of November 22, 2015, among Comtech Telecommunications Corp., Typhoon Acquisition Corp. and TeleCommunication Systems, Inc.~~	~~Exhibit 2.1 to the Registrant’s Form 8-K filed November 23, 2015~~
10(x)*	~~Credit Agreement dated as of February 23, 2016, among Comtech Telecommunications Corp., the lenders party thereto and Citibank N.A., as administrative agent and issuing bank~~	~~Exhibit 10.1 to the Registrant’s Form 8-K filed February 29, 2016~~
10(y)*	~~Form of Restricted Stock Agreement for Employees pursuant to the 2000 Stock Incentive Plan~~
10(z)*	Form of Restricted Stock Unit Agreement for Employees pursuant to the 2000 Stock Incentive Plan - 2017
~~10(aa)~~ 10(h)(2)*	Form of Restricted Stock Unit Agreement for Employees pursuant to the 2000 Stock Incentive Plan - 2016	Exhibit 10(z) to the Registrant’s 2016 Form 10-K
10(h)(3)*	Form of Restricted Stock Unit Agreement for Employees pursuant to the 2000 Stock Incentive Plan - 2013	Exhibit 10(w) to the Registrant's 2013 Form 10-K
10(h)(4)*	Form of Restricted Stock Unit Agreement for Non-employee Directors pursuant to the 2000 Stock Incentive Plan	Exhibit 10.2 to the Registrant's Form 10-Q, filed June 7, 2012
10(h)(5)*	Form of Restricted Stock Unit Agreement (eligible for dividend equivalents) for Non-employee Directors pursuant to the 2000 Stock Incentive Plan	Exhibit 10(aa) to the Registrant’s 2016 Form 10-K
~~10(ab)~~ 10(h)(6)*	Form of Restricted Stock Unit Agreement (eligible for dividend equivalents) for Non-employee Directors pursuant to the 2000 Stock Incentive Plan - 2013	Exhibit 10(x) to the Registrant's 2013 Form 10-K
10(i)(1)*	Form of Stock Unit Agreement for Non-employee Directors pursuant to the 2000 Stock Incentive Plan	Exhibit 10.1 to the Registrant's Form 10-Q, filed June 7, 2012
10(i)(2)*	Form of Stock Unit Agreement (eligible for dividend equivalents) for Non-employee Directors pursuant to the 2000 Stock Incentive Plan	Exhibit 10(v) to the Registrant's 2013 Form 10-K
10(j)(1)*	Form of Share Unit Agreement (eligible for dividend equivalents) for Employees pursuant to the 2000 Stock Incentive Plan	Exhibit 10.2 to the Registrant's Form 10-Q, filed December 9, 2013
10(j)(2)*	Form of Share Unit Agreement (eligible for dividend equivalents) for Employees pursuant to the 2000 Stock Incentive Plan - 2017
10(k)*	Form of Indemnification Agreement between the Registrant and the Named Executive Officers and Certain Other Executive Officers	Exhibit 10.1 to Registrant’s Form 8-K, filed on March 8, 2007
10(l)(1)*	Form of Change-in-Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO) and Certain Other Executive Officers	Exhibit 10.2 to the Registrant’s Form 8-K, filed June 7, 2017
10(l)(2)*	Form of Change-in-Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO) and Certain Other Executive Officers (California Employees)	Exhibit 10.3 to the Registrant’s Form 8-K, filed June 7, 2017
10(l)(3)*	Form of Change-in-Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO) and Certain Other Executive Officers (Divisional/Subsidiary Presidents)	Exhibit 10.4 to the Registrant’s Form 8-K, filed June 7, 2017
10(l)(4)*	Form of Change-in-Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO) and Certain Other Executive Officers (California Divisional/Subsidiary Presidents)	Exhibit 10.5 to the Registrant’s Form 8-K, filed June 7, 2017

7479



Exhibit Number	Description of Exhibit	Incorporated By Reference to Exhibit
~~10(ac)~~ 10(l)(5)*	Form of Change-in-Control Agreement (Tier 3) between the Registrant and Certain Non-Executive Officers	Exhibit 10.6 to the Registrant’s Form 8-K, filed June 7, 2017
10(m)*	Agreement and Plan of Merger, dated as of November 22, 2015, among Comtech Telecommunications Corp., Typhoon Acquisition Corp. and TeleCommunication Systems, Inc.	Exhibit 2.1 to the Registrant’s Form 8-K, filed November 23, 2015
10(n)(1)*	Credit Agreement, dated as of February 23, 2016, among Comtech Telecommunications Corp., the lenders party thereto and Citibank N.A., as administrative agent and issuing bank	Exhibit 10.1 to the Registrant’s Form 8-K, filed February 29, 2016
10(n)(2)*	First Amendment to Credit Agreement, dated as of June 6, 2017, among Comtech Telecommunications Corp., the lenders party thereto and Citibank N.A., as administrative agent and issuing bank	Exhibit 10.1 to the Registrant’s Form 8-K, filed June 7, 2017
10(o)(1)*	Transition Agreement, dated September 28, 2016, between the Registrant and Stanton D. Sloane	Exhibit 10(ac) to the Registrant’s 2016 Form 10-K
21	Subsidiaries of the Registrant
23.1	Consent of Independent Registered Public Accounting Firm
~~23.2~~	~~Consent of Independent Registered Public Accounting Firm~~ 31.1
~~31.1~~	Certification of President, CEO and Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of President, CEO and Chairman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* Management contract or compensatory plan or arrangement.

~~+Certain portions of this agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.~~

Exhibits to this Annual Report on Form 10-K are available from the Company upon request and payment to the Company for the cost of reproduction. The information is also available on our Internet website at ~~www.comtechtel.com~~.

7580

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	COMTECH TELECOMMUNICATIONS CORP.

~~October 6, 2016~~September 27, 2017	By: /s/Fred Kornberg
(Date)	Fred Kornberg, Chairman of the Board Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



	Signature	Title

~~October 6, 2016~~September 27, 2017	/s/Fred Kornberg	Chairman of the Board
(Date)	Fred Kornberg	Chief Executive Officer and President
		(Principal Executive Officer)

~~October 6, 2016~~September 27, 2017	/s/Michael D. Porcelain	Senior Vice President and
(Date)	Michael D. Porcelain	Chief Financial Officer (Principal Financial and Accounting Officer)


~~October 6, 2016~~September 27, 2017	/s/Edwin Kantor	Director
(Date)	Edwin Kantor


~~October 6, 2016~~September 27, 2017	/s/Ira S. Kaplan	Director
(Date)	Ira S. Kaplan


~~October 6, 2016~~September 27, 2017	/s/Robert G. Paul	Director
(Date)	Robert G. Paul


~~October 6, 2016~~September 27, 2017	/s/Dr. Yacov A. Shamash	Director
(Date)	Dr. Yacov A. Shamash


September 27, 2017	/s/Lawrence J. Waldman	Director
(Date)	Lawrence J. Waldman

7681

COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES

Index to Consolidated Financial Statements and Schedule



	Page
Reports of Independent Registered Public Accounting Firms	F- 2

Consolidated Financial Statements:

Balance Sheets as of July 31, ~~2016~~2017 and ~~2015~~2016	F- 54

Statements of Operations for each of the years in the three-year period ended July 31, ~~2016~~2017	F- 65

Statements of Stockholders' Equity for each of the years in the three-year period ended July 31, ~~2016~~2017	F- 76

Statements of Cash Flows for each of the years in the three-year period ended July 31, ~~2016~~2017	F- 87

Notes to Consolidated Financial Statements	F- 109

Additional Financial Information Pursuant to the Requirements of Form 10-K:

Schedule II – Valuation and Qualifying Accounts and Reserves	S- 1

Schedules not listed above have been omitted because they are either not applicable or the required information has been provided elsewhere in the consolidated financial statements or notes thereto.

F- 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Comtech Telecommunications Corp.

Melville, New York

We have audited the accompanying consolidated balance sheets of Comtech Telecommunications Corp. and subsidiaries (the "Company") as of July 31, ~~2016~~2017 and ~~2015,~~2016, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years ~~then ended. Our audit also included~~in the ~~information for the years~~period ended July 31, ~~2016 and 2015 in~~2017. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. The consolidated financial statements and financial statement schedule of the Company for the year ended July 31, 2014, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments discussed in Note 13 to the consolidated financial statements, were audited by other auditors whose report, dated October 9, 2014, expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of ~~Comtech Telecommunications Corp. and subsidiaries~~the Company as of July 31, ~~2016~~2017 and ~~2015,~~2016, and the results of their operations and their cash flows for each of the three years ~~then~~in the period ended July 31, 2017, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, ~~the information for the years ended July 31, 2016 and 2015 included in~~ such financial statement schedule, when considered in relation to the basic ~~2016 and 2015~~ consolidated financial statements taken as a whole, ~~presents~~present fairly, in all material respects, the information set forth therein.

We also have audited the adjustments to the 2014 consolidated financial statements to retrospectively adjust the disclosures for a change in the composition of reportable segments in 2016, as discussed in Note 13 to the consolidated financial statements. Our procedures included agreeing amounts presented within the footnote to the Company’s consolidation reports and underlying accounting records and ensuring the mathematical accuracy of all calculations. In our opinion, such retrospective adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2014 consolidated financial statements of the Company other than with respect to the retrospective adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2014 consolidated financial statements taken as a whole.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of July 31, ~~2016,~~2017, based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated ~~October 6, 2016 expressed~~September 27, 2017 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Jericho, New York

~~October 6, 2016~~September 27, 2017

F- 2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Comtech Telecommunications Corp.

Melville, New York

We have audited the internal control over financial reporting of Comtech Telecommunications Corp. and subsidiaries (the "Company") as of July 31, ~~2016,~~2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management's Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at TeleCommunication Systems, Inc. (together with its parent company and subsidiaries, “TCS”), which was acquired on February 23, 2016. TCS’s assets were $591.5 million and net sales were $151.4 million as of and for the approximate five month period ended July 31, 2016. Accordingly, our audit did not include the internal control over financial reporting at TCS. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 31, ~~2016,~~2017, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended July 31, ~~2016~~2017 of the Company and our report dated ~~October 6, 2016~~September 27, 2017 expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

Jericho, New York

~~October 6, 2016~~September 27, 2017

F- 3

~~Report of Independent Registered Public Accounting Firm~~

~~The Board of Directors and Stockholders~~

~~Comtech Telecommunications Corp.:~~

We have audited, before the effects of the adjustments to retrospectively reflect the change in the composition of reportable segments described in Note 13, the accompanying consolidated statements of operations, stockholders’ equity, and cash flows of Comtech Telecommunications Corp. for the year ended July 31, 2014. In connection with our audit of these consolidated financial statements, we also have audited the information for the year ended July 31, 2014 in the financial statement schedule listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above, before the effects of the adjustments to retrospectively reflect the change in the composition of reportable segments described in Note 13, present fairly, in all material respects, the results of operations and the cash flows of Comtech Telecommunications Corp. for the year ended July 31, 2014, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the information for the year ended July 31, 2014 included in the related financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively reflect the change in the composition of reportable segments described in Note 13 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by a successor auditor.

~~Melville, New York~~

~~October 9, 2014~~

~~F- 4~~

COMTECH TELECOMMUNICATIONS CORP.

AND SUBSIDIARIES

Consolidated Balance Sheets

As of July 31, ~~2016~~2017 and ~~2015~~2016


Assets	2016			2015		2017			2016
Current assets:
Cash and cash equivalents	$	66,805,000		150,953,000		$	41,844,000		66,805,000
Accounts receivable, net	150,967,000			69,255,000		124,962,000			150,967,000
Inventories, net	71,354,000			62,068,000		60,603,000			71,354,000
Prepaid expenses and other current assets	14,513,000			7,396,000		13,635,000			14,513,000
Deferred tax asset, net	—			11,084,000
Total current assets	303,639,000			300,756,000		241,044,000			303,639,000

Property, plant and equipment, net	38,667,000			15,370,000		32,847,000			38,667,000
Goodwill	287,618,000			137,354,000		290,633,000			287,618,000
Intangibles with finite lives, net	284,694,000			20,009,000		261,871,000			284,694,000
Deferred financing costs, net	3,309,000			—		3,065,000			3,309,000
Other assets, net	3,269,000			388,000		2,603,000			3,269,000
Total assets	$	921,196,000		473,877,000		$	832,063,000		921,196,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	33,462,000		15,708,000		$	29,402,000		33,462,000
Accrued expenses and other current liabilities	98,034,000			29,470,000		68,610,000			98,034,000
Dividends payable	7,005,000			4,839,000		2,343,000			7,005,000
Customer advances and deposits	29,665,000			14,320,000		25,771,000			29,665,000
Current portion of long-term debt	11,067,000			—		15,494,000			11,067,000
Current portion of capital lease obligations	3,592,000			—		2,309,000			3,592,000
Interest payable	1,321,000			—		282,000			1,321,000
Total current liabilities	184,146,000			64,337,000		144,211,000			184,146,000

Non-current portion of long-term debt, net	239,969,000			—		176,228,000			239,969,000
Non-current portion of capital lease obligations	4,021,000			—		1,771,000			4,021,000
Income taxes payable	2,992,000			1,573,000		2,515,000			2,992,000
Deferred tax liability, net	9,798,000			2,925,000		17,306,000			9,798,000
Customer advances and deposits, non-current	5,764,000			—		7,227,000			5,764,000
Other liabilities	4,105,000			3,633,000		2,655,000			4,105,000
Total liabilities	450,795,000			72,468,000		351,913,000			450,795,000
Commitments and contingencies (See Note 14)
Stockholders’ equity:
Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000	—			—		—			—
Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 38,367,997 shares and 31,165,401 shares at July 31, 2016 and 2015, respectively	3,837,000			3,117,000
Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 38,619,467 shares and 38,367,997 shares at July 31, 2017 and 2016, respectively						3,862,000			3,837,000
Additional paid-in capital	524,797,000			427,083,000		533,001,000			524,797,000
Retained earnings	383,616,000			413,058,000		385,136,000			383,616,000
	912,250,000			843,258,000		921,999,000			912,250,000
Less:
Treasury stock, at cost (15,033,317 shares at July 31, 2016 and 2015)	(441,849,000		)	(441,849,000	)
Treasury stock, at cost (15,033,317 shares at July 31, 2017 and 2016)						(441,849,000		)	(441,849,000	)
Total stockholders’ equity	470,401,000			401,409,000		480,150,000			470,401,000
Total liabilities and stockholders’ equity	$	921,196,000		473,877,000		$	832,063,000		921,196,000

See accompanying notes to consolidated financial statements.

F- 54

COMTECH TELECOMMUNICATIONS CORP.

AND SUBSIDIARIES

Consolidated Statements of Operations

Fiscal Years Ended July 31, 2017, 2016 ~~2015~~ and ~~2014~~2015


	2016			2015		2014		2017			2016		2015
Net sales	$	411,004,000		307,289,000		347,150,000		$	550,368,000		411,004,000		307,289,000
Cost of sales	239,767,000			168,405,000		195,712,000		332,183,000			239,767,000		168,405,000
Gross profit	171,237,000			138,884,000		151,438,000		218,185,000			171,237,000		138,884,000

Expenses:
Selling, general and administrative	94,932,000			62,680,000		67,147,000		116,080,000			94,932,000		62,680,000
Research and development	42,190,000			35,916,000		34,108,000		54,260,000			42,190,000		35,916,000
Amortization of intangibles								22,823,000			13,415,000		6,211,000
Settlement of intellectual property litigation								(12,020,000		)	—		—
Acquisition plan expenses	21,276,000			—		—		—			21,276,000		—
Amortization of intangibles	13,415,000			6,211,000		6,285,000
	171,813,000			104,807,000		107,540,000		181,143,000			171,813,000		104,807,000

Operating (loss) income	(576,000		)	34,077,000		43,898,000
Operating income (loss)								37,042,000			(576,000	)	34,077,000

Other expenses (income):
Interest expense and other	7,750,000			479,000		6,304,000		11,629,000			7,750,000		479,000
Interest income and other	(134,000		)	(405,000	)	(913,000	)	(68,000		)	(134,000	)	(405,000	)

(Loss) income before (benefit from) provision for income taxes	(8,192,000		)	34,003,000		38,507,000
(Benefit from) provision for income taxes	(454,000		)	10,758,000		13,356,000
Income (loss) before provision for (benefit from) income taxes								25,481,000			(8,192,000	)	34,003,000
Provision for (benefit from) income taxes								9,654,000			(454,000	)	10,758,000

Net (loss) income	$	(7,738,000	)	23,245,000		25,151,000
Net (loss) income per share:
Net income (loss)								$	15,827,000		(7,738,000	)	23,245,000
Net income (loss) per share:
Basic	$	(0.46	)	1.43		1.58		$	0.68		(0.46	)	1.43
Diluted	$	(0.46	)	1.42		1.37		$	0.67		(0.46	)	1.42

Weighted average number of common shares outstanding – basic	16,972,000			16,203,000		15,943,000		23,433,000			16,972,000		16,203,000

Weighted average number of common and common equivalent shares outstanding – diluted	16,972,000			16,418,000		20,906,000		23,489,000			16,972,000		16,418,000

Dividends declared per issued and outstanding common share as of the applicable dividend record date	$	1.20		1.20		1.175		$	0.60		1.20		1.20



Delaware		11-2139466
(State or other jurisdiction of incorporation /organization)		(I.R.S. Employer Identification Number)
68 South Service Road, Suite 230, Melville, NY		11747
(Address of principal executive offices)		(Zip Code)



Title of each class		Name of each exchange on which registered
Common Stock, par value $.10 per share		NASDAQ Stock Market LLC
Series A Junior Participating Cumulative



Large accelerated filer	Accelerated filer	Emerging growth company
Non-accelerated filer	Smaller reporting company



INDEX
PART I
ITEM 1.	BUSINESS	1

	Corporate Strategies	32
	Competitive Strengths	32
	Commercial Solutions Segment	5
	Government Solutions Segment	7
	Summary of Key Products, Systems and Services by Business Segment	109
	Acquisitions	1110
	Sales, Marketing and Customer Support	1110
	Backlog	1211
	Manufacturing and Service	1312
	Research and Development	1312
	Intellectual Property	1312
	Competition	1413
	Employees	14
	U.S. Government Contracts and Security Clearances	1514
	Regulatory Matters	1615

ITEM 1A.	RISK FACTORS	1817

ITEM 1B.	UNRESOLVED STAFF COMMENTS	40

ITEM 2.	PROPERTIES	41

ITEM 3.	LEGAL PROCEEDINGS	4243

ITEM 4.	MINE SAFETY DISCLOSURES	43

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	4344

	Stock Performance Graph and Cumulative Total Return	4344
	Dividends	4445
	Recent Sales of Unregistered Securities	4445
	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	4445
	Approximate Number of Equity Security Holders	4445

ITEM 6.	SELECTED CONSOLIDATED FINANCIAL DATA	4546



Commercial Solutions Segment Technologies			Government Solutions Segment Technologies

Communication Technologies	Safety and Security Technologies	Enterprise Technologies	Command and Control Technologies	Troposcatter Technologies	RF Power and Switching Technologies
Satellite Earth Station Products • Ground-based equipment such as single channel per carrier modems and solid-state amplifiers that facilitate the transmission of voice, video and data over satellite links Traveling Wave Tube Amplifiers • High power narrow-band amplifiers used to amplify signals from satellite earth stations	Safety and Security • Wireless/ VoIP 911 service for network operators • NextGen 911 • ESInet (Emergency Services IP Network)	Application Solutions • Software and equipment for Iocation-based and messaging infrastructure • Managed “cIoud-services” • Trusted Location^TM • Indoor Location	C4ISR • Tactical communications, managed networks, logistics, end-to-end integration Cyber Intelligence Solutions • ~~Cyber security~~Cybersecurity training • Computer network operations Mobile Data Communications • Secure, satellite-based mobile communications and tracking systems	Over-the-Horizon Microwave Systems • Equipment and systems that can transmit digitized voice, video and data over unfriendly or inaccessible terrain over distances from 20 to 200 miles using the troposphere	Solid State Power Amplifiers • Solid state high power broadband amplifiers designed for radar, electronic warfare, jamming, medical and aviation applications

Commercial Solutions Segment Representative Customers			Government Solutions Segment Representative Customers
Satellite systems integrators, wireless and other communication service providers, broadcasters. Domestic and international defense customers, as well as U.S. and foreign governments, prime contractors and system suppliers such as ~~L-3 Communications,~~ Harris Corporation, General Dynamics Corporation, L-3 Communications, Raytheon Company and ViaSat Inc. Satellite broadcasters, such as The DIRECTV Group and EchoStar Corporation. End-customers also include AT&T Inc., BT Group plc., China Mobile Limited, ~~Embratel Participações S.A.,~~Century Link, Comcast Corporation, Intelsat, Ltd., Globecomm Systems, Inc., Nokia Corporation, O3b Networks, Qualcomm Incorporated, Sprint Corporation and ~~Rockwell Collins,~~Verizon Communications, Inc.			U.S. Army logistics community, the U.S. Army war-fighter community, foreign governments, the U.S. Navy, prime contractors to the U.S. Armed Forces and NATO. Domestic and international defense customers, prime contractors and system suppliers such as Raytheon Company, Exelis Inc., ~~EADS~~Lockheed Martin Corporation, Telephonics, Inc. and Thales Group. Medical equipment companies, such as Varian Medical Systems, Inc., and aviation industry system integrators such as Rockwell Collins, Inc. U.S. government customers in the Middle East, Europe, North Africa and Latin America and related prime contractors and systems integrators. Oil companies such as Shell Oil Company and Petronas.



	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4748

	Overview	4748
	Critical Accounting Policies	49
	Results of Operations	5453
	Business Outlook for Fiscal 2018	53
	Comparison of Fiscal 2017 and 2016	55
	Comparison of Fiscal 2016 and 2015	56
	~~Comparison of Fiscal 2015 and 2014~~	6062
	Liquidity and Capital Resources	6467
	Recent Accounting Pronouncements	6772

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7075

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	7075

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	7075

ITEM 9A.	CONTROLS AND PROCEDURES	7075

ITEM 9B.	OTHER INFORMATION	7176

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	7277

ITEM 11.	EXECUTIVE COMPENSATION	7277

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	7277

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	7277

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	7277

PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	7378

SIGNATURES		7681

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE		F- 1


(1)	We Have Significant Exposure to Large, Growing End Markets


(2)	We Believe We Are a Market Leader in the End-Markets That We Serve


(3)	We Believe We Provide Industry Leading Innovation, Capabilities and Solutions


	Fiscal Years Ended July 31,																		Fiscal Years Ended July 31,
	2016		2015		2014		2016		2015		2014		2016		2015		2014		2017		2016		2015		2017		2016		2015		2017		2016		2015
	Commercial Solutions						Government Solutions						Consolidated						Commercial Solutions						Government Solutions						Consolidated
U.S. government	25.0	%	29.3	%	26.0	%	65.0	%	33.2	%	31.9	%	40.8	%	30.6	%	28.0	%	15.1	%	25.0	%	29.3	%	59.2	%	65.0	%	33.2	%	32.7	%	40.8	%	30.6	%
Domestic	40.6	%	15.9	%	13.9	%	11.6	%	7.9	%	10.1	%	29.2	%	13.2	%	12.6	%	54.4	%	40.6	%	15.9	%	15.5	%	11.6	%	7.9	%	38.9	%	29.2	%	13.2	%
Total U.S.	65.6	%	45.2	%	39.9	%	76.6	%	41.1	%	42.0	%	70.0	%	43.8	%	40.6	%	69.5	%	65.6	%	45.2	%	74.7	%	76.6	%	41.1	%	71.6	%	70.0	%	43.8	%

International	34.4	%	54.8	%	60.1	%	23.4	%	58.9	%	58.0	%	30.0	%	56.2	%	59.4	%	30.5	%	34.4	%	54.8	%	25.3	%	23.4	%	58.9	%	28.4	%	30.0	%	56.2	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


	Fiscal Years Ended July 31, (In thousands, except per share amounts)											Fiscal Years Ended July 31, (In thousands, except per share amounts)
	2016			2015		2014		2013		2012		2017			2016		2015		2014		2013
Consolidated Statement of Operations Data:
Net sales	$	411,004		307,289		347,150		319,797		425,070		$	550,368		411,004		307,289		347,150		319,797
Cost of sales	239,767			168,405		195,712		178,967		241,561		332,183			239,767		168,405		195,712		178,967
Gross profit	171,237			138,884		151,438		140,830		183,509		218,185			171,237		138,884		151,438		140,830

Expenses:
Selling, general and administrative	94,932			62,680		67,147		63,265		87,106		116,080			94,932		62,680		67,147		63,265
Research and development	42,190			35,916		34,108		36,748		38,489		54,260			42,190		35,916		34,108		36,748
Amortization of intangibles	13,415			6,211		6,285		6,328		6,637		22,823			13,415		6,211		6,285		6,328
Settlement of intellectual property litigation												(12,020		)	—		—		—		—
Acquisition plan expenses	21,276			—		—		—		—		—			21,276		—		—		—
	171,813			104,807		107,540		106,341		132,232		181,143			171,813		104,807		107,540		106,341

Operating (loss) income	(576		)	34,077		43,898		34,489		51,277
Operating income (loss)												37,042			(576	)	34,077		43,898		34,489

Other expenses (income):
Interest expense	7,750			479		6,304		8,163		8,832		11,629			7,750		479		6,304		8,163
Interest income and other	(134		)	(405	)	(913	)	(1,167	)	(1,595	)	(68		)	(134	)	(405	)	(913	)	(1,167	)

(Loss) Income before (benefit from) provision for income taxes	(8,192		)	34,003		38,507		27,493		44,040
Income (loss) before provision for (benefit from) income taxes												25,481			(8,192	)	34,003		38,507		27,493

(Benefit from) provision for income taxes	(454		)	10,758		13,356		9,685		11,624
Provision for (benefit from) income taxes												9,654			(454	)	10,758		13,356		9,685

Net (loss) income	$	(7,738	)	23,245		25,151		17,808		32,416
Net income (loss)												$	15,827		(7,738	)	23,245		25,151		17,808

Net (loss) income per share:
Net income (loss) per share:
Basic	$	(0.46	)	1.43		1.58		1.05		1.62		$	0.68		(0.46	)	1.43		1.58		1.05
Diluted	$	(0.46	)	1.42		1.37		0.97		1.42		$	0.67		(0.46	)	1.42		1.37		0.97

Weighted average number of common shares outstanding – basic	16,972			16,203		15,943		16,963		19,995		23,433			16,972		16,203		15,943		16,963

Weighted average number of common and common equivalent shares outstanding – diluted	16,972			16,418		20,906		23,064		25,991		23,489			16,972		16,418		20,906		23,064

Dividends declared per issued and outstanding common share as of the applicable dividend record date	$	1.20		1.20		1.175		1.10		1.10		$	0.60		1.20		1.20		1.175		1.10


	As of July 31, (In thousands)						As of July 31, (In thousands)
	2016		2015	2014	2013	2012	2017		2016	2015	2014	2013
Consolidated Balance Sheet Data:
Total assets	$	921,196	473,877	473,852	681,815	719,778	$	832,063	921,196	473,877	473,852	681,815
Working capital	119,493		236,419	224,656	220,560	434,221	96,833		119,493	236,419	224,656	220,560
Debt, including capital leases	258,649		—	—	—	—	195,802		258,649	—	—	—
Convertible senior notes	—		—	—	200,000	200,000	—		—	—	—	200,000
Other long-term obligations	4,105		3,633	4,364	3,958	5,098	2,655		4,105	3,633	4,364	3,958
Stockholders’ equity	470,401		401,409	396,925	404,062	429,401	480,150		470,401	401,409	396,925	404,062


(i)	Consolidated EBITDA definition more closely aligns with our Adjusted EBITDA metric by eliminating favorable adjustments to operating income related to settlements of TCS intellectual property matters;


(4)	We Have a Diverse Global Customer Base


(ii)	Leverage Ratio is calculated on a “gross” basis using the quotient of Total Indebtedness (excluding unamortized deferred financing costs) divided by our TTM Consolidated EBITDA. The prior Leverage Ratio was calculated on a “net” basis but did not include a reduction for any cash or cash equivalents above $50.0 million;


(iii)	Fixed Charge Coverage Ratio includes a deduction for all cash dividends, regardless of the amount of our cash and cash equivalents and the related allowable Quarterly Dividend Amount, as defined, will now align with our current quarterly dividend target of $0.10 per common share;


(iv)	Balloon or final payment of the Term Loan Facility, which is not due until February 23, 2021, was reduced by $22.5 million through increased borrowings from the Revolving Loan Facility, which does not expire until February 23, 2021; and


(v)	Leverage Ratios will be adjusted, in certain conditions, to provide for additional flexibility for us to make acquisitions.



	Obligations Due by Fiscal Years or Maturity Date (in thousands)
	Total		2017	2018 and 2019	2020 and 2021	After 2021
Secured Credit Facility, including interest	$	302,174	22,236	53,717	226,221	—
Operating lease commitments	55,654		15,310	18,920	11,216	10,208
Capital lease obligations	8,167		3,921	3,942	304	—
Net contractual cash obligations	$	365,995	41,467	76,579	237,741	10,208



	Obligations Due by Fiscal Years or Maturity Date (in thousands)
	Total		2018	2019 and 2020	2021 and 2022	After 2022
Secured Credit Facility - principal payments	$	196,485	15,494	35,415	145,576	—
Secured Credit Facility - interest payments	23,284		7,331	12,798	3,155	—
Operating lease commitments	45,622		12,374	15,856	9,538	7,854
Capital lease obligations	4,304		2,494	1,810	—	—
Net contractual cash obligations	$	269,695	37,693	65,879	158,269	7,854


	Common Stock			Additional Paid-in Capital				Retained Earnings				Treasury Stock					Stockholders' Equity				Common Stock				Additional Paid-in Capital			Retained Earnings				Treasury Stock						Stockholders' Equity
	Shares	Amount					Shares					Amount			Shares		Stockholders' Equity				Amount			Shares				Retained Earnings			Amount							Stockholders' Equity
Balance as of July 31, 2013	29,066,792	$	2,907,000	Additional Paid-in Capital		$	363,888,000	Retained Earnings			$	403,398,000	12,608,501			$	(366,131,000	)		$	404,062,000
Equity-classified stock award compensation	—	—		4,242,000				—				—	—				4,242,000
Equity-classified stock awards issued	—	—		139,000				—				—	—				139,000
Proceeds from exercise of options	255,094	26,000		6,032,000				—				—	—				6,058,000
Proceeds from issuance of employee stock purchase plan shares	38,571	4,000		909,000				—				—	—				913,000
Common stock issued for net settlement of stock-based awards	85,108	8,000		(1,159,000		)		—				—	—				(1,151,000		)
Debt converted to shares of common stock	1,570,904	157,000		49,596,000				—				—	—				49,753,000
Cash dividends declared	—	—		—				(18,993,000		)		—	—				(18,993,000		)
Accrual of dividend equivalents	—	—		—				(113,000		)		—	—				(113,000		)
Net income tax shortfall from settlement of stock-based awards	—	—		(466,000		)		—				—	—				(466,000		)
Reversal of deferred tax assets associated with expired and unexercised stock-based awards	—	—		(1,941,000		)		—				—	—				(1,941,000		)
Repurchases of common stock	—	—		—				—				2,249,081	(70,729,000		)		(70,729,000		)
Net income	—	—		—				25,151,000				—	—				25,151,000
Balance as of July 31, 2014	31,016,469	3,102,000		421,240,000				409,443,000				14,857,582	(436,860,000		)		396,925,000				31,016,469	$	3,102,000		Additional Paid-in Capital	$	421,240,000		$	409,443,000			14,857,582		$	(436,860,000	)		$	396,925,000
Equity-classified stock award compensation	—	—		4,387,000				—				—	—				4,387,000				—	—			4,387,000			—				—		—				4,387,000
Proceeds from exercise of options	50,000	5,000		1,434,000				—				—	—				1,439,000				50,000	5,000			1,434,000			—				—		—				1,439,000
Proceeds from issuance of employee stock purchase plan shares	34,310	3,000		914,000				—				—	—				917,000				34,310	3,000			914,000			—				—		—				917,000
Common stock issued for net settlement of stock-based awards	64,622	7,000		(480,000		)		—				—	—				(473,000		)		64,622	7,000			(480,000		)	—				—		—				(473,000		)
Cash dividends declared	—	—		—				(19,406,000		)		—	—				(19,406,000		)		—	—			—			(19,406,000		)		—		—				(19,406,000		)
Accrual of dividend equivalents	—	—		—				(224,000		)		—	—				(224,000		)		—	—			—			(224,000		)		—		—				(224,000		)
Net income tax shortfall from settlement of stock-based awards	—	—		(341,000		)		—				—	—				(341,000		)		—	—			(341,000		)	—				—		—				(341,000		)
Reversal of deferred tax assets associated with debt converted to shares of common stock	—	—		(58,000		)		—				—	—				(58,000		)		—	—			(58,000		)	—				—		—				(58,000		)
Reversal of deferred tax assets associated with expired and unexercised stock-based awards	—	—		(13,000		)		—				—	—				(13,000		)		—	—			(13,000		)	—				—		—				(13,000		)
Repurchases of common stock	—	—		—				—				175,735	(4,989,000		)		(4,989,000		)		—	—			—			—				175,735		(4,989,000		)		(4,989,000		)
Net income	—	—		—				23,245,000				—	—				23,245,000				—	—			—			23,245,000				—		—				23,245,000
Balance as of July 31, 2015	31,165,401	3,117,000		427,083,000				413,058,000				15,033,317	(441,849,000		)		401,409,000				31,165,401	3,117,000			427,083,000			413,058,000				15,033,317		(441,849,000		)		401,409,000
Common stock issued from equity offering, net of issuance costs	7,145,000	715,000		93,355,000				—				—	—				94,070,000				7,145,000	715,000			93,355,000			—				—		—				94,070,000
Equity-classified stock award compensation	—	—		4,076,000				—				—	—				4,076,000				—	—			4,076,000			—				—		—				4,076,000
Proceeds from issuance of employee stock purchase plan shares	45,319	4,000		672,000				—				—	—				676,000				45,319	4,000			672,000			—				—		—				676,000
Common stock issued for net settlement of stock-based awards	12,277	1,000		(106,000		)		—				—	—				(105,000		)		12,277	1,000			(106,000		)	—				—		—				(105,000		)
Cash dividends declared	—	—		—				(21,549,000		)		—	—				(21,549,000		)		—	—			—			(21,549,000		)		—		—				(21,549,000		)
Accrual of dividend equivalents	—	—		—				(155,000		)		—	—				(155,000		)		—	—			—			(155,000		)		—		—				(155,000		)
Net income tax shortfall from settlement of stock-based awards	—	—		(27,000		)		—				—	—				(27,000		)		—	—			(27,000		)	—				—		—				(27,000		)
Reversal of deferred tax assets associated with expired and unexercised stock-based awards	—	—		(256,000		)		—				—	—				(256,000		)		—	—			(256,000		)	—				—		—				(256,000		)
Net loss	—	—		—				(7,738,000		)		—	—				(7,738,000		)		—	—			—			(7,738,000		)		—		—				(7,738,000		)
Balance as of July 31, 2016	38,367,997	$	3,837,000	$	524,797,000			$	383,616,000			15,033,317	$	(441,849,000	)		$	470,401,000			38,367,997	3,837,000			524,797,000			383,616,000				15,033,317		(441,849,000		)		470,401,000
Equity-classified stock award compensation																					—	—			8,467,000			—				—		—				8,467,000
Proceeds from issuance of employee stock purchase plan shares																					64,367	7,000			687,000			—				—		—				694,000
Issuance of restricted stock, net																					144,988	14,000			(14,000		)	—				—		—				—
Common stock issued for net settlement of stock-based awards																					42,115	4,000			(266,000		)	—				—		—				(262,000		)
Cash dividends declared																					—	—			—			(14,034,000		)		—		—				(14,034,000		)
Accrual of dividend equivalents																					—	—			—			(273,000		)		—		—				(273,000		)
Net income tax shortfall from settlement of stock-based awards																					—	—			(248,000		)	—				—		—				(248,000		)
Reversal of deferred tax assets associated with expired and unexercised stock-based awards																					—	—			(422,000		)	—				—		—				(422,000		)
Net income																					—	—			—			15,827,000				—		—				15,827,000
Balance as of July 31, 2017																					38,619,467	$	3,862,000		$	533,001,000		$	385,136,000			15,033,317		$	(441,849,000	)		$	480,150,000

COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Consolidated Statements of Cash Flows Fiscal Years Ended July 31, 2016, 2015 and 2014
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Consolidated Statements of Cash Flows Fiscal Years Ended July 31, 2017, 2016 and 2015								COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Consolidated Statements of Cash Flows Fiscal Years Ended July 31, 2017, 2016 and 2015

	2016			2015		2014			2017			2016		2015
Cash flows from operating activities:
Net (loss) income	$	(7,738,000	)	23,245,000		25,151,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net income (loss)									$	15,827,000		(7,738,000	)	23,245,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment	9,830,000			6,525,000		6,721,000			14,354,000			9,830,000		6,525,000
Amortization of intangible assets with finite lives	13,415,000			6,211,000		6,285,000			22,823,000			13,415,000		6,211,000
Amortization of stock-based compensation	4,117,000			4,363,000		4,263,000			8,506,000			4,117,000		4,363,000
Amortization of deferred financing costs	795,000			65,000		1,107,000			1,977,000			795,000		65,000
Settlement of intellectual property litigation									(12,020,000		)	—		—
Change in fair value of contingent liability									—			(359,000	)	—
(Gain) loss on disposal of property, plant and equipment	(21,000		)	3,000		13,000			(126,000		)	(21,000	)	3,000
Change in fair value of contingent liability	(359,000		)	—		(239,000	)
Provision for allowance for doubtful accounts	907,000			764,000		120,000			497,000			907,000		764,000
Provision for excess and obsolete inventory	2,780,000			2,813,000		2,952,000			2,900,000			2,780,000		2,813,000
Excess income tax benefit from stock-based award exercises	(28,000		)	(148,000	)	(738,000	)		(82,000		)	(28,000	)	(148,000	)
Deferred income tax benefit	(3,241,000		)	(2,365,000	)	(404,000	)
Deferred income tax expense (benefit)									9,056,000			(3,241,000	)	(2,365,000	)
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable	5,806,000			(15,132,000	)	(5,092,000	)		25,508,000			5,806,000		(15,132,000	)
Inventories	8,280,000			(3,446,000	)	1,250,000			7,812,000			8,280,000		(3,446,000	)
Prepaid expenses and other current assets	2,112,000			543,000		(1,879,000	)		(956,000		)	2,112,000		543,000
Other assets	(86,000		)	(39,000	)	46,000			666,000			(86,000	)	(39,000	)
Accounts payable	(1,255,000		)	(3,194,000	)	512,000			(4,472,000		)	(1,255,000	)	(3,194,000	)
Accrued expenses and other current liabilities	(13,465,000		)	(815,000	)	(840,000	)		(22,058,000		)	(13,465,000	)	(815,000	)
Customer advances and deposits	(6,397,000		)	1,631,000		(2,195,000	)		(2,431,000		)	(6,397,000	)	1,631,000
Other liabilities, non-current	(882,000		)	(931,000	)	300,000			(1,442,000		)	(882,000	)	(931,000	)
Interest payable	1,292,000			(29,000	)	(1,372,000	)		(1,039,000		)	1,292,000		(29,000	)
Income taxes payable	(892,000		)	1,662,000		(1,373,000	)		1,355,000			(892,000	)	1,662,000
Net cash provided by operating activities	14,970,000			21,726,000		34,588,000			66,655,000			14,970,000		21,726,000
Cash flows from investing activities:
Purchases of property, plant and equipment									(8,150,000		)	(5,667,000	)	(3,362,000	)
Payments for business acquisition, net of cash acquired	(280,535,000		)	—		—			—			(280,535,000	)	—
Purchases of property, plant and equipment	(5,667,000		)	(3,362,000	)	(4,937,000	)
Net cash used in investing activities	(286,202,000		)	(3,362,000	)	(4,937,000	)		(8,150,000		)	(286,202,000	)	(3,362,000	)
Cash flows from financing activities:
Borrowings of debt	353,904,000			—		—
Repayment of long-term debt under Term Loan Facility									(33,567,000		)	(77,353,000	)	—
Net (payments) borrowings under Revolving Loan Facility									(26,500,000		)	83,904,000		—
Cash dividends paid									(18,872,000		)	(19,406,000	)	(19,426,000	)
Repayment of principal amounts under capital lease obligations									(3,592,000		)	(1,753,000	)	—
Payment of deferred financing costs									(1,085,000		)	(9,464,000	)	—
Payment of issuance costs related to equity offering									(626,000		)	(476,000	)	—
Proceeds from issuance of employee stock purchase plan shares									694,000			676,000		917,000
Excess income tax benefit from stock-based award exercises									82,000			28,000		148,000
Borrowings of long-term debt under Term Loan Facility									—			250,000,000		—
Proceeds received from equity offering	95,029,000			—		—			—			95,029,000		—
Required payments for debt assumed for business acquisition	(134,101,000		)	—		—			—			(134,101,000	)	—
Repayment of long-term debt including capital lease obligations	(99,106,000		)	—		(149,963,000	)
Cash dividends paid	(19,406,000		)	(19,426,000	)	(18,677,000	)
Payment of deferred financing costs	(9,464,000		)	—		(84,000	)
Payment of issuance costs related to equity offering	(476,000		)	—		—
Proceeds from exercises of stock options									—			—		1,439,000
Repurchases of common stock	—			(4,989,000	)	(70,729,000	)		—			—		(4,989,000	)
Proceeds from exercises of stock options	—			1,439,000		6,058,000
Proceeds from issuance of employee stock purchase plan shares	676,000			917,000		913,000
Excess income tax benefit from stock-based award exercises	28,000			148,000		738,000
Payment of contingent consideration related to business acquisition	—			—		(49,000	)
Net cash provided by (used in) financing activities	187,084,000			(21,911,000	)	(231,793,000	)
						(Continued)
Net cash (used in) provided by financing activities									(83,466,000		)	187,084,000		(21,911,000	)


	Preliminary Purchase Price Allocation⁽¹⁾			Measurement Period Adjustments⁽²⁾		Purchase Price Allocation (as adjusted)			Purchase Price Allocation
Shares of TCS common stock purchased	$	318,605,000		—		318,605,000			$	318,605,000
Stock-based awards settled	21,827,000			—		21,827,000			21,827,000
Aggregate purchase price at fair value	$	340,432,000		—		340,432,000			$	340,432,000
Allocation of aggregate purchase price:
Cash and cash equivalents	$	59,897,000		—		59,897,000			$	59,897,000
Current assets	115,797,000			(130,000	)	115,667,000			115,913,000
Deferred tax assets, net, non-current	72,700,000			10,820,000		83,520,000			85,490,000
Property, plant and equipment	26,720,000			—		26,720,000			25,689,000
Other assets, non-current	2,641,000			—		2,641,000			2,641,000
Current liabilities (excluding interest accrued on debt)	(87,700,000		)	(32,056,000	)	(119,756,000	)		(123,956,000		)
Debt (including interest accrued)	(134,101,000		)	—		(134,101,000	)		(134,101,000		)
Capital lease obligations	(8,993,000		)	—		(8,993,000	)		(8,993,000		)
Other liabilities	(9,156,000		)	—		(9,156,000	)		(9,156,000		)
Net tangible assets at fair value	$	37,805,000		(21,366,000	)	16,439,000			$	13,424,000
Identifiable intangible assets, deferred taxes and goodwill:								Estimated Useful Lives				Estimated Useful Lives
Customer relationships and backlog	$	225,900,000		(2,800,000	)	223,100,000		21 years	$	223,100,000		21 years
Trade names	20,000,000			—		20,000,000		10 to 20 years	20,000,000			10 to 20 years
Technology	35,000,000			—		35,000,000		5 to 15 years	35,000,000			5 to 15 years
Deferred tax liabilities	(105,422,000		)	1,051,000		(104,371,000	)		(104,371,000		)
Goodwill	127,149,000			23,115,000		150,264,000		Indefinite	153,279,000			Indefinite
Allocation of aggregate purchase price	$	340,432,000		—		340,432,000			$	340,432,000


⁽¹⁾	~~As initially reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2016.~~


							(Unaudited)
	For the Fiscal Years Ended July 31,						For the Fiscal Years Ended July 31,
	2016			2015			2016			2015
Net sales	$	611,241,000		$	664,315,000		$	611,241,000		$	664,315,000
Net loss	(30,750,000		)	(13,299,000		)	(30,750,000		)	(13,299,000		)
Basic net loss per share	(1.81		)	(0.82		)	(1.81		)	(0.82		)
Diluted net loss per share	(1.81		)	(0.82		)	(1.81		)	(0.82		)



	At August 1, 2008
Total non-cancelable lease obligations	$	12,741,000
Less: Estimated sublease income	8,600,000
Total net estimated facility exit costs	4,141,000
Less: Interest expense to be accreted	2,041,000
Present value of estimated facility exit costs	$	2,100,000


	Cumulative Activity Through July 31, 2016			Cumulative Activity Through July 31, 2017
Present value of estimated facility exit costs at August 1, 2008	$	2,100,000		$	2,100,000
Cash payments made	(9,013,000		)	(10,588,000		)
Cash payments received	8,600,000			8,600,000
Accreted interest recorded	1,640,000			1,829,000
Liability as of July 31, 2016	3,327,000
Liability as of July 31, 2017				1,941,000
Amount recorded as accrued expenses and other current liabilities in the Consolidated Balance Sheet	1,386,000			1,535,000
Amount recorded as other liabilities in the Consolidated Balance Sheet	$	1,941,000		$	406,000


	As of		As of
	July 31, 2016		July 31, 2017
Future lease payments to be made	$	3,327,000	$	1,941,000
Interest expense to be accreted in future periods	401,000		212,000
Total remaining payments	$	3,728,000	$	2,153,000


Fiscal 2017	$	3,921,000
Fiscal 2018	2,473,000			$	2,494,000
Fiscal 2019	1,469,000			1,492,000
Fiscal 2020	304,000			318,000
Fiscal 2021 and beyond				—
Total minimum lease payments	8,167,000			4,304,000
Less: amounts representing interest	(554,000		)	224,000
Present value of net minimum lease payments	7,613,000			4,080,000
Current portion of capital lease obligations	3,592,000			2,309,000
Non-current portion of capital lease obligations	$	4,021,000		$	1,771,000



	July 31, ~~2016~~2017
Stock options	~~2,256,679~~1,855,875
Performance shares	~~173,852~~252,089
RSUs and restricted stock	~~34,858~~292,260
Share units	~~8,503~~285,848
Total	~~2,473,892~~2,686,072


	Awards (in Shares)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value		Awards (in Shares)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at July 31, 2013	3,047,910		$	29.94
Granted	458,110		29.14
Expired/canceled	(492,060	)	42.90
Exercised	(881,064	)	26.55
Outstanding at July 31, 2014	2,132,896		28.17					2,132,896		$	28.17
Granted	416,525		33.78					416,525		33.78
Expired/canceled	(46,400	)	30.20					(46,400	)	30.20
Exercised	(383,338	)	27.61					(383,338	)	27.61
Outstanding at July 31, 2015	2,119,683		29.33					2,119,683		29.33
Granted	552,806		27.15					552,806		27.15
Expired/canceled	(396,610	)	28.99					(396,610	)	28.99
Exercised	(19,200	)	27.24					(19,200	)	27.24
Outstanding at July 31, 2016	2,256,679		$	28.87	6.67	$	1,000	2,256,679		28.87
Expired/canceled								(400,804	)	30.15
Outstanding at July 31, 2017								1,855,875		$	28.60	5.56	$	—

Exercisable at July 31, 2016	1,154,882		$	28.60	5.42	$	—
Exercisable at July 31, 2017								1,261,529		$	28.55	4.84	$	—

Vested and expected to vest at July 31, 2016	2,174,225		$	28.86	6.62	$	1,000
Vested and expected to vest at July 31, 2017								1,799,732		$	28.58	5.51	$	—



	Awards (in Shares)		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at July 31, 2013	102,334		$	25.80
Granted	95,326		26.48
Converted to common stock	(7,857	)	26.18
Forfeited	(9,706	)	24.83
Outstanding at July 31, 2014	180,097		26.20
Granted	66,294		33.96
Converted to common stock	(18,422	)	27.79
Forfeited	(3,804	)	32.47
Outstanding at July 31, 2015	224,165		28.26
Granted	71,605		27.45
Converted to common stock	(16,439	)	26.35
Forfeited	(62,118	)	27.62
Outstanding at July 31, 2016	217,213		$	28.32	$	2,839,000

Vested at July 31, 2016	35,855		$	27.24	$	469,000

Vested and expected to vest at July 31, 2016	209,521		$	28.26	$	2,738,000


	Fiscal Year Ended July 31, 2014										Fiscal Year Ended July 31, 2015
		Commercial Solutions		Government Solutions		Unallocated		Total			Commercial Solutions			Government Solutions		Unallocated		Total
Net sales		$	228,745,000	118,405,000		—		$	347,150,000		$	203,674,000		103,615,000		—		$	307,289,000
Operating income (loss)		$	25,756,000	32,687,000		(14,545,000	)	$	43,898,000		$	20,733,000		30,004,000		(16,660,000	)	$	34,077,000

Net income (loss)		$	24,974,000	32,729,000		(32,552,000	)	$	25,151,000		$	20,502,000		30,033,000		(27,290,000	)	$	23,245,000
Income taxes		531,000		—		12,825,000		13,356,000
Interest (income) and other		4,000		(39,000	)	(878,000	)	(913,000		)
(Benefit from) provision for income taxes											(142,000		)	—		10,900,000		10,758,000
Interest (income) and other expense											92,000			(30,000	)	(467,000	)	(405,000		)
Interest expense		247,000		(3,000	)	6,060,000		6,304,000			281,000			—		198,000		479,000
Amortization of stock-based compensation		—		—		4,263,000		4,263,000			—			—		4,363,000		4,363,000
Amortization of intangibles		6,285,000		—		—		6,285,000			6,211,000			—		—		6,211,000
Depreciation		5,333,000		1,327,000		61,000		6,721,000			5,250,000			1,242,000		33,000		6,525,000
Strategic alternatives analysis expenses and other		—		(56,000	)	225,000		169,000			—			—		585,000		585,000
Adjusted EBITDA		$	37,374,000	33,958,000		(9,996,000	)	$	61,336,000		$	32,194,000		31,245,000		(11,678,000	)	$	51,761,000

Purchases of property, plant and equipment		$	3,831,000	1,089,000		17,000		$	4,937,000		$	2,233,000		1,063,000		66,000		$	3,362,000
Total assets at July 31, 2014		$	246,822,000	77,116,000		149,914,000		$	473,852,000
Total assets at July 31, 2015											$	233,965,000		95,314,000		144,598,000		$	473,877,000


Fiscal Year:
2017	$	15,310,000
2018	10,451,000		$	12,374,000
2019	8,469,000		9,114,000
2020	6,121,000		6,742,000
2021	5,095,000		5,316,000
2022			4,222,000
Thereafter	10,208,000		7,854,000
Total	$	55,654,000	$	45,622,000