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Comtech Telecommunications Does the Right Thing by Fixing Errors in Latest Report

From time to time, I've zeroed in on various public companies who erroneously calculate a non-GAAP financial measure called EBITDA (earnings before interest, taxes, depreciation, and amortization) in violation of SEC Regulation G.  According to the SEC Compliance & Disclosure Interpretations, EBITDA is defined as net income (not operating income) before interest, taxes, depreciation, and amortization. In other words, the only way for a public company to properly calculate EBITDA is by starting with net income and adding back interest, taxes, depreciation and amortization. Any different calculation cannot be called EBITDA, but can be called "Adjusted EBITDA.”

Today, I am pleased to report that Comtech Telecommunications (NASDAQ: CMTL) released its Q4 financial results and properly revised its previous erroneous EBITDA calculation to call it an alternative "Adjusted EBITDA" in compliance with SEC rules.

Last July, I reported that Comtech erroneously added back "amortization of stock-based compensation" to net income to compute EBITDA. See below:

In its Q4 2010 financial report released yesterday, Comtech added back "amortization of stock-based compensation" and "impairment of goodwill" (two items not properly included in an EBITDA calculation) to properly compute an alternative non-GAAP "Adjusted EBITDA" in compliance with SEC Regulation G. See below:

In the recent past, (NASDAQ: OSTK) CEO Patrick Byrne orchestrated a smear campaign against me and hired internet stalker Judd Bagley to pretext my children and relatives after I pointed out various violations of Generally Accepted Accounting Principles (GAAP) and SEC rules governing non-GAAP financial measures such as EBITDA. The company's pretexting operation targeted dozens of other journalists, bloggers, critics, and their children, too. Barry Rithholtz called Judd Bagley a "possible pedarast." is under SEC investigation.

Unlike, Comtech took the high road and corrected its errors without attacking a critic. My only suggestion is for the company to file amended form 8-Ks with the SEC to correct previous erroneous EBITDA calculations in its filings.

Other companies still on my radar for erroneous EBITDA calculations include: Penson Worldwide (NASDAQ: PNSN), A. H. Belo Corporation (NYSE: AHC), FirstService Corporation (NASDAQ: FSRV), Animal Health International, Inc. (NASDAQ: AHII), Schawk Inc. (NYSE: SGK), and Penn National Gaming Inc. (NASDAQ: PENN). Hopefully, they will do the right thing, too.

As an award, I am sending Comtech President and CEO Fred Kornberg a personally autographed Crazy Eddie Antar wanted poster. However, he will have to settle for my autograph since Eddie and I are not on speaking terms.

Written by:

Sam E. Antar


I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of our family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals.

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

Recently, I exposed GAAP violations by (NASDAQ: OSTK) which caused the company to restate its financial reports for the third time in three years. The SEC is now investigating and its CEO Patrick Byrne for securities law violations (Details here, here, and here).

In addition, the SEC is now investigating possible GAAP violations by (NASDAQ: BIDZ) after I alerted them about the company's inventory accounting practices.

I do not own any securities in the companies cited in this blog post, long or short. My investigation of these companies is a freebie for securities regulators to get me into heaven, though I doubt I will ever get there.


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Did a Clever SEC Bait Goldman Sachs into Compounding Its Legal Problems With the "Kiss of Death" Message?

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The Kiss of Death

In filing its lawsuit against Goldman Sachs (NYSE: GS) on a Friday, the Securities and Exchange Commission sent what I call the "kiss of death" message to the embattled company. In other words, the SEC wanted to stick it to Goldman Sachs and Fabrice Tourre, the Executive Director of Goldman Sachs International, who is also a defendant in the complaint. While the SEC as a practice does inform target companies and individuals of an impending enforcement action, it does not always tell them exactly when such an action will be filed.

Apparently, the SEC filed its lawsuit without giving Goldman Sachs the heads up that it was planning to file it that day. Business Insider observed that Goldman Sachs was clearly unprepared to respond to the complaint as news of the lawsuit dominated the headlines all day. Goldman issued a short denial around noon and issued an extensive denial late in the afternoon, after most people had … CEO Patrick Byrne Sleeps With a Gun

Suggested Reading: Hatchet Man Judd Bagley's Downward Spiral: Junkie, Confessed Criminal, Admitted Adulterer by Sam Antar (here), and Closing the File on a Criminal and Junkie Named Judd Bagley by Gary Weiss (here)

In numerous blog posts in the past, and in widespread media coverage, evidence has accumulated for years that CEO (NASDAQ: OSTK) Patrick Byrne has shown signs of being mentally unbalanced and paranoid.

Byrne has blamed his company's financial woes on an unnamed "Sith Lord." He hired paid goons to stalk his real and imagined adversaries and to write lengthy conspiracy theories on the Internet. Byrne has close ties with Bo Gritz. The Anti-Defamation League lists Bo Gritz as a far-right extremist with “extensive connections to both white supremacists and anti-government groups and leaders.”

Patrick Byrne's infamous temper tantrums when he doesn’t get want he wants are well documented too. He made obscene and misogynistic commen…

Nature's Sunshine Products, Willbros Group, Cal Dive International, and BSQUARE Violate S.E.C. Rules on Calculating EBITDA

Nature’s Sunshine Products (NASDAQ: NATR), Willbros Group (NYSE: WG), Cal Dive International (NYSE: DVR), and BSQUARE (NASDAQ: BSQR) have recently issued earnings reports which include a calculation of EBITDA (earnings before interest, taxes, depreciation, and amortization) that apparently does not comply with Securities and Exchange Commission interpretations for Regulation G governing such non-GAAP financial measures. In each case, their erroneous EBITDA calculations have enabled them to significantly distort their financial performance by erroneously reporting a positive EBITDA, when they should have reported a negative EBITDA in the latest quarter.

How EBITDA is supposed to be calculated under Regulation G

According to the S.E.C. Compliance & Disclosure Interpretations, EBITDA is defined under Regulation G as net income (not operating income) before net interest, taxes, depreciation, and amortization. See below:

Question 103.01Question: Exchange Act Release No. 47226 describes E…