Ladies and gentlemen, thank you for standing by. Welcome to Comtech Telecommunications Corp 4th Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. And 1 on your push button phone.
As a reminder, this conference is being recorded Monday, October 4, 2021. I would now like to turn the conference over to Mr. Jason DiLorenzo of Comtech Telecommunications. Please go ahead, sir.
Thank you, and good afternoon. Welcome to the Comtech Telecommunications Corp. Conference call for the Q4 and full fiscal year 2021. With us on the call today are Fred Kornberg, Chairman of the Board and Chief Executive Officer of Comtech Michael D. Porcelain, President and Chief Operating Officer and Michael Bondi, Chief Financial Officer.
Before we proceed, I need to remind you of the company's Safe Harbor language. Certain information presented in this call will include, but not be limited to, information relating to the future performance and financial condition of the company The company's plans, objectives and business outlook and the plans, objectives and business outlook of the company's management The company's assumptions regarding such performance, business outlook and plans are forward looking in nature and involve significant risks and uncertainties. Actual results could differ materially from such forward looking information. Any forward looking statements are qualified in their entirety by cautionary statements contained in the company's Securities and Exchange Commission filings. I am pleased now to introduce the Chairman and Chief Executive Officer of Comtech, Fred Kornberg.
Fred?
Thank you, Jason, and good afternoon, everyone, and thank you for joining us on this call. Today is an exciting day. As I hope you all saw, in addition to announcing our 4th quarter results, Our full year results and our initial fiscal 2022 financial targets, we also announced a leadership change. Mike Porchlin, our President and COO will become our Chief Executive Officer by the end of calendar year 2021. Mike will also continue as President of Comtech and join our Board of Directors.
In making this change, the Board has asked that I take on a senior advisor role on technology matters and continue as a Director and a Non Executive Chairman of the Board. As you know, I have worked with Mike for many years And I have tremendous confidence in him. I want to congratulate him on his well deserved appointment. Mike brings to his new role A track record of professional dedication and achievement and a deep knowledge of Comtech. Our Board also recently has taken other important actions.
In July, Judy Chambers was appointed to the Board, Bringing fresh perspectives and enhancing diversity. Not only is Judy the 2nd female member of our Board, Judy is also the 1st African American to join the Board. She is already making invaluable contributions to Comtech, And we're confident that she will continue to do so for many years ahead. At the same time that Judy joined our Board, We also announced that our longest serving outside directors will be retiring as of the upcoming annual meeting. These directors have been wise stewards of our business and I want to personally thank them for their tireless efforts on behalf of our shareholders.
And in August 2021, we announced that our refreshed Board intends to submit a plan to Comtech shareholders to eliminate our staggered 3 year terms for our directors. As the company continues building value for our shareholders, our Board remains committed to sound corporate governance practices and productive shareholder engagement. Before we turn To the details of our Q4, I also want to acknowledge that we received notice from one of our shareholders, Outerbridge Capital Management of its intent to nominate 3 individuals for the election to our Board. Our leadership team and members of our Board have met several times without a bridge since June. We have listened to their perspectives and Sorted Constructive Dialogue.
When out of reach privately proposed 2 director candidates at the beginning of August, Our Board initiated a thoughtful review of the individuals. Out of Ridge lately publicly nominated 3 different individuals to join the Board. The Nominating and Governance Committee once again Is thoroughly reviewing these proposed candidates and following our standard procedures for doing so. At this time, we have nothing further to report on this. And as always though, we remain open to constructive dialogue with all of our shareholders.
With all that out of the way, let's get down to today's business and let me turn it over to Mike Blondie, our CFO, who will provide a discussion of our financials. And after that, Michael Porcelain will provide an update on our business. Mr. Barny?
Thank you, Fred, and good afternoon, everyone. We are incredibly proud of our performance during fiscal 2021 and ended the year slightly above our full year guidance. This was a tremendous feat as we continue to navigate the lingering effects of COVID-nineteen and related issues that have impacted our business since early in calendar year 2020. Net sales were $145,800,000 in Q4. Of these sales, 72% were to U.
S.-based customers with 28% to international customers. For the year, net sales were $581,700,000 Now these sales, 76.1 percent were to U. S.-based customers with 23.9% to international customers. Bookings for the Q4 were strong. We received $168,200,000 in orders, resulting in a book to bill ratio of 1.15 times for the For the year, we achieved bookings of $623,100,000 resulting in a book to bill ratio of 1.07 times for the year, higher than what we achieved in fiscal 2020, which was 0.95 times.
The full year's performance was strong given the headwinds we faced from COVID-nineteen, which impacted almost all of our global customers. Our gross profit percentage in Q4 of fiscal 2021 was 37.8%, and for the year, it was 36.8%. SG and A for Q4 for fiscal 2021 was $27,800,000 or 19.1 percent of consolidated net sales. For the year, SG and A was $111,800,000 or 19.2 percent of consolidated net sales. Turning to R and D, we invested $11,800,000 in the 4th quarter or 8.1 percent of net sales.
For the year, we invested $49,100,000 or 8.4 percent of consolidated net sales. Total amortization of stock based compensation during Q4 of fiscal 2021 was $6,800,000 and for the year was 10,000,000 Total amortization of intangibles was $5,300,000 in the Q4 of fiscal 2021 and for the year it was $21,000,000 Our GAAP operating income for the Q4 was $9,700,000 and reflects $1,600,000 of restructuring costs, $500,000 of acquisition plan expenses and $500,000 of COVID-nineteen related costs. Excluding such costs, non GAAP operating income in Q4 would have been $12,200,000 or 8.4 percent of consolidated net sales. As disclosed in our earnings release and discussed on prior conference calls, We had large acquisition plan expenses and other costs during the year. Excluding such costs, non GAAP operating income for the full fiscal year 2021 would have been $36,100,000 or 6.2 percent of net sales.
Our adjusted EBITDA was $26,400,000 or 18.1 percent of consolidated net sales for the 4th quarter. For the year, the $76,500,000 of adjusted EBITDA represents 13.2% of our consolidated net sales. On a segment basis, in Q4, our Commercial Solutions segment contributed $20,200,000 of adjusted EBITDA or 20.4 percent of related net sales. For the year, it contributed $66,300,000 of adjusted EBITDA or 18.4 percent of related net sales. Turning to our Government Solutions segment, we had $2,400,000 of adjusted EBITDA in Q4 or 5.2 percent of related net sales.
For the year, our Government Solutions segment delivered adjusted EBITDA of $16,300,000 or 7.4 percent of related net sales. Interest expense was $1,600,000 in the 4th quarter And for fiscal 2021, it was $6,800,000 Our income tax expense in Q4 was only $578,000 And for the year, we actually generated a benefit of $1,500,000 On the bottom line, our GAAP net income in Q4 2021 was $7,400,000 or $0.28 per diluted share. Non GAAP net income for Q4 of 2021 was $6,200,000 or $0.23 per diluted share. For fiscal 2021, Our GAAP net loss was $73,500,000 or a loss of $2.86 per diluted share. Non GAAP net income for fiscal 2021 was $22,400,000 or $0.86 of net income per diluted share.
Despite being impacted by COVID-nineteen for the full fiscal year, our fiscal 2021 non GAAP net income and EPS represents substantial improvements as compared to fiscal 2020. Details of our non GAAP reconciling items can be found in the tables at the bottom of today's earnings release. Cash generated by operating activities was $15,900,000 for the 4th quarter. For the year, excluding a $70,000,000 merger termination payment, our net cash from operating activities would have been $29,400,000 Our balance sheet as of July 31, 2021 includes $30,900,000 of cash and cash equivalents, And our total debt outstanding was $201,000,000 Our current secured leverage ratio as defined in our credit facility was 2.53x. Now before turning it over to Mike, let me provide some comments on our initial fiscal 2022 financial targets that we issued earlier.
We are targeting fiscal 2022 consolidated net sales within a range of $580,000,000 to $600,000,000 and adjusted EBITDA between $70,000,000 $76,000,000 These targets reflect the strength of the company's backlog and a healthy sales pipeline, offset by anticipated impacts of COVID-nineteen and tightening global supply chain constraints. In addition, we expect to incur start up costs associated with the opening of 2 new high volume technology manufacturing facilities. It is really tough to accurately estimate the extent of those costs because COVID has caused delays in our move and increased our costs due to duplicate facilities that we have to maintain. Also, Our fiscal 2022 financial targets reflect the impact of the recently completed withdrawal of U. S.
Troops from Afghanistan and other U. S. Government program changes we previously announced. We estimate total fiscal 2022 amortization of intangible assets to be around $22,000,000 Stock based compensation expense is expected to range from $12,000,000 to $14,000,000 Interest expense is currently expected to be around $6,500,000 in fiscal 2022 and our effective tax rate for fiscal 2022 excluding discrete items is estimated to approximate 22%. Now some color on the cadence of our expected fiscal 2022 performance.
Q1 of fiscal 2022 is expected to be the lowest quarter of financial performance in fiscal 2022. Based on our current expectations of revenues in our Government Solutions segment, we anticipate virtually no adjusted EBITDA in our Government Solutions segment in Q1 or Q2. Additionally, with recent spikes in COVID-nineteen and supply chain issues, Commercial Solutions segment is being impacted. These issues are expected to result in lower than typical revenues and adjusted EBITDA for our Commercial Solutions segment in the first half of the fiscal year, but a strong second half as we deliver on our backlog and new orders that are expected to come in. Based on what we are seeing, we believe these constraints represent significant performance headwind and believe that our consolidated Q1 revenues We'll approximate $115,000,000 with adjusted EBITDA in the neighborhood of $3,000,000 We are closely monitoring our inventory needs and our supplier base, and we cautiously expect these constraints to ease up during the second half of fiscal twenty twenty two.
As such, we believe that quarterly results after our Q1 will sequentially improve with Q4 being the peak quarter in 2022 by far. With backlog of $658,900,000 which is $38,000,000 higher than fiscal 2020 ending backlog and a strong sales pipeline, we feel pretty good about the full year. Contributing to our confidence It's our expectation that our Government Solutions segment will benefit from higher margin programs during the second half of fiscal twenty twenty two, including the receipt of new orders for the Comtech Comet and other troposcatter solutions. These opportunities are well defined and feedback from the customer have been terrific. Now I'll hand it over to Michael Porcelain.
Mike?
Thanks and good afternoon, everyone. First, let me start out by thanking Fred on behalf of myself, the management team, our employees, the Board and our stockholders for his years of dedication, leadership and service to Comtech and to its customers. At the same time, I'm also honored that the Board has appointed me CEO. I look forward to continue to work with them, the entire Comtech team to implement a range of important initiatives already underway and to carry our strong momentum forward. I do believe we are uniquely positioned to capitalize core.
Our business in an environment where reliable forecasting remains challenging. I am confident that we have the right long term strategy. In this regard, as you can see from our Q4 and fiscal year results, that strategy is clearly paying off. Key bookings received in Q4 include multiyear contracts valued at $23,500,000 $23,000,000 to deploy and Corp. We certainly have a market leadership position in the Next Generation 911 space.
During fiscal 2021, we were awarded multiyear contracts totaling over $200,000,000 Also, Frost and Sullivan, a leading industry research firm recognized Comtech for achieving the most significant year over year market share increase in this space. We also have a strong leadership position in our satellite earth station product line. Here, Northern Sky Research, a leading consulting firm, recognized Comtech as a leader in the growing satellite cellular backhaul market. Perhaps the best independent validation of our strength Was the 4th quarter award of a multiyear contract from a large new customer to customize Comtech's next generation broadband satellite technology. This was a huge win and our team did an awesome job in capturing this program.
Our next generation satellite earth station Product line technology will be customized for this large customer so that it can be used with thousands of low earth orbit or LEO satellites expected to be launched. Based on our current pipeline of opportunities, we believe we have well over $1,000,000,000 of visibility to future potential revenue. And importantly, this does not include LEO opportunities associated with this new large customer, which could amount to several 100 of 1,000,000 of dollars of incremental orders to Comtech. Let me now talk about our team's successes in terms of business performance and other contract wins. I also want to touch on the direction of where we see things headed.
In our Commercial Solutions segment, net sales were $99,200,000 in Q4 and $360,100,000 for fiscal 2021, an increase of 1.8% over fiscal 2020. We received orders totaling $120,800,000 in Q444 141,300,000 for the year, resulting in a very strong book to bill ratio for the year for this segment of 1.23. Looking forward, we expect fiscal 2022 sales in this segment to be higher than the level we achieved in fiscal 2021. We continue to see positive momentum in our public safety and location technology product lines. Net sales during the quarter were higher than last year's comparable quarter and for the year were slightly higher, reflecting increased sales of next Generation 911 solutions, offset in part by the absence of 911 wireless call routing sales to AT and T.
Now let me highlight some great wins this year that position us for growth. We previously announced $100,000,000 plus statewide contract to design, deploy and operate next generation 911 services for the Commonwealth of Pennsylvania. Work under this contract is expected to increase in fiscal 2022 as compared to 2021. We also received additional orders from our $54,000,000 contract to design, deploy and operate next generation 911 services for the state of South Carolina. We also won a multiyear statewide contract award valued $35,800,000 to design, deploy and operate next generation 911 services for the state of Arizona.
The total contract value includes a multiyear contract extension. The contract with Arizona includes implementing our next generation 911 solutions to provide citizens with advanced communication capabilities when calling for emergency services, including police, fire and emergency medical services. Through use of our next generation core services technology, Arizona will be able to offer a seamless, coordinated and efficient next generation 911 system to each of the state's local 911 centers. At the same time, the award includes an ability for Arizona to purchase Comtech Solacom Call Handling Solutions for PSAPs as well as our new cybersecurity software training program that will be available for first responders on a statewide basis. This was the 1st cyber contract win that included our security software training and solutions, And we hope to have more to come.
We also announced the contract award to provide NG911 services for the state of Iowa. This multiyear statewide contract includes extension options and is valued at up to 48,500,000 Initial funding for the contract was $23,000,000 Additionally, and as mentioned on prior calls, Comtech has been selected as the winner of a multiyear NG911 contract for the state of Ohio. We do anticipate that this contract will be initially funded in our fiscal 2022. Other notable and key contract awards in our public safety and location technology product line during Q4 include the following: A $7,100,000 contract for the deployment of a cellular based wireless emergency alert solution with AT and T. It will allow citizens in the designated area to receive government issued alerts on their mobile devices, warning them of imminent threats to life and property based on location, similar to severe weather alerts that you currently receive on your cell phone.
Next, we received a contract from a channel partner valued up to $4,700,000 to supply new software releases to messaging applications used by a U. S. Tier 1 mobile network operator. Separately, we received another $4,000,000 maintenance renewal to continue to provide messaging application support, also for a U. S.
Tier 1 mobile network operator and the growth in messaging demand. Lastly, we received $3,200,000 of additional funding related to a next generation 911 modernization project for U. S. Military end customer. Solacom will provide this customer with our Guardian Call Management solution, a full turnkey solution.
This solution will be deployed in a redundant multi geo diverse configuration system, ensuring the highest possible service availability with an intuitive user interface. It will allow government call takers to quickly assess, prioritize and handle landline, wireless and Voice over IP emergency calls. Call takers can quickly create conferences, transfer calls, determine the location of callers and replay recently recorded conversations. And as you can see, our call handling solution is extremely robust. As I have stated on prior calls, we are ideally positioned to continue to build out various situational awareness data products for our 911 customers and are working on several exciting initiatives in the public safety area.
In addition to incorporating our first cybersecurity software training program in the next generation 911 contract win with Arizona. We have now begun marketing a new solution called Smart Response. This is a newly developed cloud based solution that offers a common operational solution that offers a 1st responders and effective data driven response for security agencies and others. This solution can provide live feeds from traffic cameras, caller information, criminal history and other key critical information at the tap of a button. The Smart Response solution empowers PSAP employees to ensure the appropriate resources are on the scene to better service the public in emergency situations.
Sales of this product are expected to be nominal in fiscal 2022, but we are investing R and D in this product line in 2022 to meet a critical and growing need of 911 operators. All in all, we do believe that potential customers are increasing Their funding for next generation 911 solutions recognizing the critical importance of upgrading 911 systems. I cannot understate that 911 service is a vital part of U. S. Government's nationwide emergency response and Disaster Preparedness System.
In this regard, I want to point out to you that satellite services are playing a more important role in the nationwide 911 network, not only in rural areas, but as backup for public answering points or PSAPs and individual callers as well. For instance, in August 2021, it was reported that Apple Who's working on incorporating satellite capabilities for its iPhone models that will allow users to call and or text in emergency systems. I believe that our satellite systems, including our SCPC and TDMA networking platforms, will be incorporated into 911 systems. Without a doubt, given our expertise in public safety systems and satellite ground station equipment, I believe we are uniquely positioned to be a leader this growing market. At this point, let me provide some updates on our satellite ground station business itself.
Net sales for both the quarter and the year were higher than last year, even though this product line continues to be impacted by the pandemic's effect on customer demand, particularly in international markets, but constitutes a large majority of end users for these solutions. As you know, We did complete our acquisition of UHP Networks in March, and we believe UHP's revolutionary technology has the potential to transform the growing very small aperture terminal market and our participation in it. With end markets for high speed satellite based network significantly growing. We are excited to have extended our product offerings to include UHP's TDMA satellite modems. We are educating our sales force and modifying our sales efforts to establish ourselves as a leader in both TDMA and SCPC solutions.
Our customers and the industry are clearly just excited as we are. For example, because of our UHP acquisition, We were able to announce a strategic technology partnership with Kymeta, a mobile antenna company. Working together with them, we have expanded distribution of our TDMA modems and strengthen our ability to offer integrated VSAT solutions. This partnership expands our solutions and capabilities offered to both our government and military user base, and we expect it to benefit both of our segments over the long term. Other awards for our satellite ground station product line included the following: multiple contracts aggregating $6,300,000 for high power 500 Watt Ka Band TWTAs for high throughput satellite systems.
Multiple contracts aggregating $3,600,000 from a U. S. Systems integrator for X band solid state power amplifiers and block up converters for transportable satellite communication terminals. And a multimillion dollar order from a leading system integrator in the South Asia for WAN optimization equipment to be utilized by a Ministry of Defense in that region. Despite the impact of COVID-nineteen supply chain issues, We still believe our satellite earth station product line is set for growth.
We continue to see strong sales pipeline growth for satellite based cellular backhaul services due to increased penetration of 4 gs and 5 gs, particularly in developing parts of the world. There remains a growing need to use satellite network technologies in remote areas where terrestrial network infrastructure is lacking. Now let me turn to our Government Solutions segment, where we continue to navigate challenging dynamics, including lumpy order flow. Sales in this segment were $46,600,000 as compared to $64,700,000 in Q4 of last year. Revenues in this segment were significantly impacted by the April 21 announcement of U.
S. Troop patrols and other U. S. Government program changes. Revenues in this segment for each of the first three quarters fiscal 2022 are expected to be slightly lower than the $46,600,000 achieved this quarter.
Thereafter, the For the full fiscal year, net sales were $221,500,000 which represents a decrease of 15.8% from the prior year. Bookings in our Government Solutions segment for Q4 were $47,500,000 with a book to bill ratio of 1.02. For the full fiscal year, bookings were $181,800,000 with a book to bill ratio of 0.82. Sales and adjusted EBITDA contributions in this segment in the future are expected to come from sales of joint cyber analysis cost training solutions, Continuing anticipated awards for high reliability Triple E Space Parts and Engineering Services, including those used to support NASA missions, Anticipated orders for our high power amplifiers, many of which are used in funded electronic warfare programs, Large awards for troposcata systems, including the COMET and deliveries of existing backlog for VSATs, Satellite Equipment and XY Satellite Antenners. With respect to our joint cyber analysis cost training solutions, I am pleased to report that earlier today, we announced that we were awarded a 5 year IDIQ contract from the U.
S. Government for Joint Cyber Analysis Cost Training Solutions valued at almost $125,000,000 This award was a renewal and acknowledges our excellence in developing and delivering complex cybersecurity operations, training at the operations and at the scale required by our federal government customers. Given that this is one of our nation's top priorities, we do expect to receive additional funding on this contract over the course of fiscal 2022 and beyond. We're honored to continue to perform this important work for our customers. Given the expected low level of revenues in this segment and the start up costs relating to the opening of our UK manufacturing center.
As Mike had mentioned, adjusted EBITDA in Segment will be unusually low for the 1st 3 quarters. But as we look to the second half, we are seeing strong interest across the board for our common troposcatter terminals and other new VSAT solutions that we are actively discussing and demonstrating with our customers. Trials and demos are well underway and in several instances, we have been told we have been selected as the sole source for their needs. Timing on these common and other large troposcatter programs have always been difficult to predict and lumpy and 2022 is no different. That said, we view it not as a matter of if, but of when.
Overall, it will be a challenging year for this segment, So we are optimistic that we are on the right track. Now let me turn it back to Fred, who will provide some closing remarks. Fred?
Thank you, Mike. As I mentioned before, I am very pleased with how our business is performing In spite of continuing COVID headwinds, particularly some great wins in the 4th quarter, Our 2021 results demonstrate our success in executing our plan, the strong market leadership ship positions we have and the resilience of our business. We navigated challenging market conditions, Delivered strong financial performance with significant year over year bookings and backlog growth, Giving us significant comfort with our outlook and visibility into the future. Despite continuing COVID headwinds. I continue to be excited about prospects going into fiscal 2022 and beyond, including our strengthening positions on the large developing near term opportunities that Mike just mentioned.
I believe our achievements and prospects confirm that we have the right strategy, the right team and the right focus to create long term value for our shareholders for many years ahead. Reflecting This confidence in our business outlook, our Board of Directors once again declared a dividend of $0.10 per common share payable on November 12, 2021 to shareholders of record at the close of business on October 13, 2021. Now I would like to proceed to the question and answer part of our call. Operator?
And we'll take our first question from Joe Gomes with Noble Capital Markets. Please go ahead.
Good afternoon, Fred and Mike. Congratulations on today's announcements.
Thank you, Joe.
So you talked a lot about some of these supply chain constraints. And I was wondering, You might give us a little more detail there as much as you can as to what Lee, are you referring to here where it's impacting the most on the company and how quickly you might be able to get past these here?
Sure. If you go back a few months ago when we announced our Q3 call, we To disclose in our 10 Q that we saw some sort of extended lead times. And as the quarter continued, things sort of got a little worse. I would say to you that we've seen lead times for parts that are normally 20 to 30 weeks being extended to 40, 50 and in some cases, 60 weeks. And we sort of saw that in the Q4.
We probably have about 5 or 6 key vendors that Have chips to everybody in the industry, so we're not it's not something unique to us. The good thing is, is that we have pretty good relationships in the sense that we are one of the larger manufacturers of satellite equipment, especially on the West Coast. So we feel we have pretty good visibility as to when Supply chain will be coming in, and it's really reflective in the guidance that we put out. So we do think, for us, It's going to ease up really towards the tail end of our Q1. And then as the quarters come in, we think we've got a Good visibility to the parts coming in and our ability to ship in the latter part of the year.
Okay. Thank you for that insight. And you mentioned some significant CapEx expenditures for the year. I was wondering if you could kind of Quantify for us what was CapEx in fiscal 2021 and how much higher do you think it should be in fiscal 2022?
Hi, Joe. I'll take that. In terms of the CapEx requirements and investments we plan to make next year, in our releases Today, we did highlight that we expect it could get up to about $30,000,000 The timing of that is spread out over the course of 2022 And possibly even into 2023. But those investments are specific to a few things that we have Going concurrently, we have the NG911 programs that we won and we have booked over $200,000,000 in contract value this year. So these investments are to support those great wins that Comtech had this year.
And then also, we have the 2 new facilities That we're getting online this year to support our high volume manufacturing for the next generation satellite ground station equipment that we expect to sell. So the timing of that, it's a little tricky to pinpoint the exact dollar amount by quarter, But we do see that probably in Q2 and Q3 being at its peak and then tailing off in Q4.
Okay. Thanks for that. And one more for me and I'll get back in the queue. So obviously, last quarter you announced the big satellite earth station win. Going through the release, it looks like you're not including Much of anything outside of the initial $13,000,000 order in fiscal 2022 results.
I was wondering if you could talk a little bit more about that, how that project is unfolding so far? And also, are there other opportunities there, which the company is pursuing?
Yes, Joe, it's a great question. So I would love to share as much detail as possible as I could about the contract because the excitement that We have internally is just tremendous. It's a large new customer and certainly Thousands of satellites are expected to be launched and you could refer to public documents about that. And look, when we sit back, The best we could tell you is that this is 100 100 of 1,000,000 of dollars of opportunities. And we're the only ones that we're aware of that has announced an award of such size.
I could tell you that work is well underway with this customer. We're working hand in hand with them. I can tell you that relationships with this customer are growing every day and are fantastic. We meet with them regularly, including we just had a Satcom show where we had Very good conversations about their needs and some of the things that we can provide to them. As you know, we are an expert Not only on the satellite ground station side, but experts on manufacturing.
And certainly, our decision to build out a new manufacturing center And Chandler should speak for itself. At the same time, we're also, I would say, best in class related to The U. S. Military and DoD when it comes to satellites. So I think if you just take all of the data points that we have to offer And what I could share with you, you can kind of connect your own dots, but I am very subject to a strong nondisclosure with this customer and That's about the best I could say, but there's nothing but excitement, nothing but good things happening.
And let me leave it at that.
All right. Sounds good. Thanks, Mike.
We'll take our next question from Mike Latimore with Northland Capital. Please go ahead.
Thank you. Yes, and Mike and Fred, congratulations On your new roles there. Sounds great.
Thank you.
So I guess, Mike, you talked about the Pipeline and commercial being strong. Can you just elaborate on that a little more? Is it, on Next Gen 9 11 like winning more states Or would it be enhancing services that you're providing the current state wins? And then on the satellite air station side, does that strong pipeline reflect this large customer specifically? Or are there others kind of in the mix there?
So yes, I guess one way to answer it is The latter part of what you just said, Mike, our satellite earth station pipeline is strong. Our 911 pipeline is strong, And that excludes those opportunities with our large new customers. So the basic business of selling satellite modems, amplifiers, our networks It's very strong is strong on the commercial side and on the defense side. So we do see a growing pipeline. We also have the benefit of the UHP acquisition, and we're offering the UHP satellite network technology to customers, training our sales force, Educating them about our capabilities of how we're going to integrate our UHP technology, if you will, with our Knights our HEIGHTS platform.
And so that process is well underway. On our 911 business, I could say and again, I'm not going to point out to you the specific states that we're chasing. Although, as I always say, if you look hard enough, you'll find it. But there are several states out there that have big opportunities out there. And we do think that these big opportunities could translate into orders during fiscal 2022.
And I would categorize that pipeline as pretty strong. Adding that on top is this large new opportunity with our Large new customer.
Yes. Okay, great. And then in terms of The Afghan withdrawal, you quantified that a little bit last quarter. I guess any more detail on how we You should think about the revenue impact from that withdrawal in 2022 versus 2021?
Sure, Mike. I'll take that. In terms of the impact of that TRUPA draw that's now complete and other program changes that we saw As we are going into Q4, we're expecting that to continue into the Q3 of fiscal 2022. And when we're looking at what we see out there for right now, it's going to roughly be what we did similar to Q4, probably a little bit below that level For at least the next quarter or 2 before it starts to pick up as we start moving into higher margin programs later in the year.
Mike, if I could also just give you another data point just to look at with public numbers. If you look at what our government segment did last Here in Q1 and Q2 and just sort of averaged it out. You can see on the average for Q1 and Q2 of last year, we did about $64,000,000 65 $1,000,000 of revenue. And if you look at Q3, Q4, it came quite sudden, The impact, but you could see we did less than $50,000,000 or $48,000,000 in Q3, dollars 46,000,000 in Q3. And as we said in our prepared remarks, We do think we're going to bounce around the $40,000,000 level for Q1, Q2, Q3.
That difference on a quarterly run rate It's about the difference we're seeing due to the withdrawal and the other changes in the government programs. And The one thing again, timing is always difficult for us to predict, but we're assuming we're going to be able to get these common orders in, in the second half and ship them in Q4. They could come in earlier, where maybe Q3 is a lot better than what we're thinking. But we'd like to think we're taking a cautious view at the moment in terms of timing. But we used the word lumpy because the programs are difficult to predict.
All right, all right. Okay, got it. And then just last on international. How is the sort of pipeline activity internationally? Are some of these, I don't know, Comet, Troposcat opportunities there as well?
Just a little more color on international would be great.
Yes. On the tropo side and the comment, there are international opportunities as well as regular troposcatter opportunities. Despite COVID restrictions, we were able to, as I call, sneak in a couple of travel visits overseas. And I don't Sneak in where we did something improper, but we were able to get them in before the restrictions came back into place. So we were able to get some demos overseas done, and We've been told, in some cases, we're sole source and those opportunities are moving.
So yes, it's on the tropo side, it's both. On the international side, We're definitely getting impacted on the satellite ground station part of the business. The SATCOM show that took place in September Had virtually no one from Europe there. So that was a little disappointment that we do think will impact our 2020 to thought process, but that's reflective in the guidance we're giving.
All right, all right. Okay, great. Thanks a lot. Good luck.
Thank you.
We'll move next to Caleb Henry with Quilty Analytics. Please go ahead.
Hi. Two questions from me. First, I don't know if it's too early or not, but we're kind of seeing some Momentum with the Space Development Agency on their own military LEO constellation. They've talked about that one going to I think 1,000 MAX. So separate from your commercial project, but I was just curious if you see any opportunity with the SDA or if the U.
S. Military's interest in LEO Constellations is having any impact on the ground equipment that you're providing or even doing R and D on?
I don't want to tell you what we're doing from a competitive perspective. I'll refer to my remarks about Our strength in the defense side, and I think we could be a thought leader in the LEO space, but let me just keep it at that.
Okay. And then my other question was just on cybersecurity of the $125,000,000 IDIQ. Can you talk about some of the demand drivers for cyber training? And I guess where you're seeing that come from, if it's Just within if it's just for military applications, if you're also seeing this from like state and local government or even satellite operators?
Yes, it's really 2 pieces. The $125,000,000 contract is somewhat of a renewal, but increased funding versus what we've had in prior years. So we're expecting to get funding throughout the year off that $125,000,000 and again, continue the work that we've done with the truly Department of Homeland Security and Special Operations over the course of the year. Where that contract really focuses in on. And the contract award that we actually got did exceed our original thinking by multiples of 1,000,000.
And that is the evidence to us of the demand for cyber courses related to the government. At the same time, we've taken our competencies that we've learned on that contract and I've applied it to the public safety market. It's an initiative that we've been working over the last 12 months, And we were successful in getting the state of Arizona to include the cyber training offering to PSAPs in the state of Arizona. It was our first contract win, and we're in the process of Talking to other states, including those states that we do business with, and we're optimistic that we could really build a new product line In the public safety market, given our expertise as it relates to cyber training, I mean, clearly, as I mentioned, The 911 service is a vital part of the government's emergency response and disaster preparedness system. It's going to be hacked.
It will be hacked Time and time again and to make sure that it's not hacked or that employees are trained on how to handle it, we think we could help Our 911 customers deal with it both on a reactive basis and a proactive basis as well.
Thank you.
And we'll take our next question from Kyle McNealy with Jefferies. Please go ahead.
Hi, great. Thanks a lot for the question. Congrats from us as well on the management announcement. Best of luck in the new roles all around. Can I guess I wanted to ask little bit about TDMA and SEPC and wanted to see if you could give us a sense for how your satellite ground station revenue mix of TDMA type use cases Is tracking versus your internal plan for HEIGHTS and UHP?
And I guess I consider that to be HEIGHTS, Which could be targeted at previously TDMA use cases and UHP. Is there a way for you to quantify how much is heightened UHP as a percentage of total ground station right now and Where that might go in the future, maybe into 2022?
Yes. It's actually a good question, Kyle. I would say Our early read, we've only owned the UHP business since March of 2021. And I think our early read is that there's a lot of demand for TDMA solutions. And maybe there's a bigger market on the TDMA side versus maybe our HEIGHTS product line.
I think we're adjusting that as we speak to customers in terms of would they prefer a TDMA solution versus a HEIGHTS. So I would say to you that there's been a tilt in our thinking more towards TDMA than our heights just in terms of that. Is that a 5% swing, 10% swing in the thought process, too early for me to say, but that's an early observation that I think we have, and we'll see how that plays out.
Is there an approximate like overall mix of the UHP Plus heights that you have in your revenue stream right now like as of Q4?
Yes, I would prefer not To disclose that, again, for competitive reasons, it's a very small portion of our business. I mean, we talked about UHB itself being a small product line addition. And I just think at this point, I just want to stick to the qualitative comments rather than the quantitative piece.
Okay. Yes, fair enough. That's fine. And then what's your assumption for the COVID and supply chain issues that you mentioned continuing to weigh on 2022? Do you have a specific timeframe when that will normalize as contemplated in your guidance?
Like when does it get better? I mean, you talked about the second half being much Bigger than the first half. So perhaps it's around the middle of the year, but what should we think about kind of getting past the worst of it or When you start seeing it normalize within the 2022 fiscal year?
I think it will be at the start of our Q3. I think, look, we're seeing we definitely have visibility, we think, to our supply chain constraints that we're seeing. Again, we've kind of Working with our vendors, and Mike's thinking revenue for Q1 is going to be about $1.15 In terms of revenue, and we talked about nominal improvement in Q2. You could probably take that number up by 10% in Q2 Just to sort of give you a sense of the way we're thinking about it, but it's going to be a Q3, Q4 event where we do think things will start to Back to normal, if you will. And certainly, by Q4, we should be humming again.
Okay.
Thanks very much. Maybe it comes earlier, Kyle, but We're using the words we're taking a cautious view and maybe a realistic view at the same time.
Okay, great. Yes, thank you.
We'll move next to Asiya Merchant with Citibank. Please go ahead.
Hi. Congratulations again, Mike and Fred. Just most of my questions have been answered here. But In terms of EBITDA as it relates to clearly the supply chain disruptions and the COVID anticipated effects that you're seeing. Can you kind of talk a little bit about what would EBITDA have been without these In each of probably in your commercial segment the most because obviously your government is also seeing lots of revenues from the Afghan program.
But just at least if you could guide us on what was your commercial EBITDA expected to be without The supply chain disruptions that you guys are thinking about now.
So, C. A, this is Mike. I'll take that. In terms of the Q1, we have definitely a few things going on with respect to COVID and the supply chain. We are seeing The impact of that, we also in terms of our EBITDA guidance, we're also considering that we're migrating our production to a new facility and that's ongoing during the first half for sure.
In terms of what it could have been, Had these supply chain issues not sort of surfaced in recent months, I would say it would be back to our historical EBITDA margins minus those events. But just with where we are 2 months into the quarter already, it's Basically what we see today looking out for the next month.
Okay. And then in terms of cash Mike, I know you talked about a heavier CapEx cycle in fiscal 2022. How should I think about cash flow generation as a percentage of revenues for fiscal 2022?
Yes. I think it's early in the year to give a number, a precise number, but we're thinking as we normally do, have strong cash flows for the full year From operations, we do see things rebounding, leveraging our balance sheet, collecting our receivables in the first couple of quarters of the year. So I think when we boil it all together, we do expect to see traditional cash flows from operations that we normally would throw off to support our cash investments and CapEx and other endeavors.
Okay. So you wouldn't be taking on any additional debt here?
Throughout the quarters, there's a likelihood that we Good borrow on our facility. We have room on our facility to support the cash investments that we're incurring to build out the facilities As well as the NG911 projects. But I think it's going to be more in the Q2, Q3 timeframe where we'll see maybe higher levels of debt and then it'll throttle down Back to existing levels that we see today towards the end of FY 2022.
Okay. Thank you.
It does appear there are no further questions at this time.
Okay. That concludes today's call. Thank you again for joining us today and we look forward to Speaking with you again in December. Thank you very much.
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