CalAmp Corp. (Nasdaq: CAMP), a leading provider of wireless
products, services, and solutions, today reported results for its
fiscal 2008 fourth quarter and full-year ended February 28, 2008.
Information reported herein is consistent with preliminary results
described in a press release issued by the Company on April 22,
2008. Key elements include: Consolidated fourth quarter revenues of
$29.8 million; Wireless DataCom Division revenues of $20.5 million,
14% higher than prior year. Fourth quarter GAAP loss from
continuing operations of $9.2 million, or $0.37 per diluted share,
includes non-cash pretax charge of $5.5 million for goodwill
impairment; Adjusted basis (non-GAAP) loss from continuing
operations of $2.7 million or $0.11 per diluted share. Fourth
quarter net cash provided by operations of $2.6 million; cash and
cash equivalents balance increased to $6.6 million. Announced
amendment of credit agreement with lenders that eliminates previous
default conditions and establishes new financial covenants. Rick
Gold, CalAmp�s President and Chief Executive Officer, commented,
�Fiscal 2008 presented CalAmp with extraordinary financial and
operational challenges, but I am encouraged by recent
accomplishments. The requalification of our products with a key DBS
customer and the amendment to our credit agreement with our lenders
provide us with added momentum and enhanced financial flexibility.
In my new role as CEO, I look forward to leading CalAmp�s dedicated
team as we build on our strong foundation and work to return CalAmp
to profitability.� Mr. Gold added, �Consolidated fourth quarter
revenues of $29.8 million were within our original expectations and
I am pleased to report that we generated net cash from operating
activities of $2.6 million in the quarter. These results were
driven by the Wireless DataCom Division, which recorded revenues of
$20.5 million, a 14% increase over the same quarter last year. The
critical mass we have achieved in Wireless DataCom gives us a
competitive advantage that most other players cannot match in the
markets we serve. CalAmp is in the enviable position of having
vertically integrated capabilities coupled with a broad range of
technology platforms. This gives CalAmp the ability to provide our
customers with high value, end-to-end solutions for their
mission-critical wireless communications requirements.� Mr. Gold
concluded, �With the product requalification having been obtained
from our historically largest DBS customer, the production lines
for these products have been restarted, and we anticipate that our
shipments to this customer will resume by the end of this month. We
expect to be shipping a mix of both revenue-generating new units
and refurbished units that were returned by the customer for rework
under the product warranty. We look forward to re-establishing a
profitable commercial relationship with this important customer.�
Fiscal 2008 Fourth Quarter Results Total revenue for the fiscal
2008 fourth quarter was $29.8 million compared to $55.0 million for
the fourth quarter of fiscal 2007. Lower sales of Satellite
Division products in the latest quarter were partially offset by
higher Wireless DataCom Division revenues. Gross profit for the
fiscal 2008 fourth quarter was $7.5 million, or 25.3% of revenues
compared to $10.7 million or 19.4% of revenues for the same period
last year. The reduction in gross profit was primarily the result
of lower sales of Satellite Division products. The improvement in
gross margin percentage was due primarily to a change in product
mix favoring increased sales of higher margin Wireless DataCom
Division products. Results of operations for the fiscal 2008 fourth
quarter as determined in accordance with U.S. Generally Accepted
Accounting Principles ("GAAP") was a loss from continuing
operations of $9.2 million, or $0.37 per diluted share. The loss
includes a $5.5 million pretax goodwill impairment charge comprised
of impairments in the Satellite and Wireless DataCom divisions of
$1.2 million and $4.3 million, respectively. This goodwill
impairment charge resulted from the second phase of the impairment
test and is in addition to the impairment charges recorded during
the third quarter of fiscal 2008. The fourth quarter of fiscal 2008
also includes a pretax charge of $850,000 for expenses associated
with the departure of the Company�s former chief executive officer.
The Adjusted Basis (non-GAAP) loss from continuing operations for
the fiscal 2008 fourth quarter was $2.7 million, or $0.11 per
diluted share compared to Adjusted Basis income from continuing
operations of $2.8 million or $0.11 per diluted share for the same
period last year. Adjusted Basis income (loss) from continuing
operations excludes the impact of amortization of intangible
assets, stock-based compensation expense and the impairment loss,
each net of tax to the extent applicable. A reconciliation of the
GAAP basis income (loss) from continuing operations to Adjusted
Basis income (loss) from continuing operations is provided in the
table at the end of this press release. Liquidity At February 28,
2008, the Company had total cash of $6.6 million, with $27.5
million in total outstanding bank debt and a $5 million note
payable to a key DBS customer. As previously disclosed, during the
fiscal fourth quarter, the Company announced the amendment of its
credit agreement with its lenders. Under the terms of the amended
credit agreement, the lenders agreed to waive the financial
covenant violations that existed for the first three quarters of
fiscal 2008. In addition, financial covenants contained in the
original credit agreement, including a fixed charge coverage ratio,
a leverage ratio and minimum net worth requirement, have been
eliminated and replaced with new covenants that require minimum
levels of consolidated earnings before interest, taxes,
depreciation and amortization (EBITDA) and Wireless DataCom
Division revenues. The credit agreement as amended will have a
maturity date of June 30, 2009, with financial incentives to repay
all borrowings by December 31, 2008. Further details of the terms
and conditions of this credit agreement amendment are provided in
the Company�s Form 8-K that was filed with the Securities and
Exchange Commission on March 3, 2008. Net cash provided by
operating activities was $2.6 million for the three months ended
February 28, 2008. For the year ended February 28, 2008, net cash
used by operating activities was $1.5 million. Inventory was $25.1
million at the end of the fourth quarter, representing annualized
turns of approximately 3 times. Accounts receivable outstanding at
the end of the fourth quarter represents a 55 day average
collection period. Business Outlook Commenting on the Company's
business outlook, Mr. Gold said, �While I am pleased with our
recent progress, our first quarter outlook is cautious due in part
to continued uncertainty surrounding the U.S. economy, which could
impact purchase decisions by key customers. Based on our current
forecast, we believe fiscal 2009 first quarter consolidated
revenues will be in the range of $29 to $32 million, with a GAAP
basis net loss in the range of $0.05 to $0.08 per diluted share.
The Adjusted Basis (non-GAAP) results of operations for the first
quarter, which exclude amortization of intangible assets and
stock-based compensation expense net of tax, are expected to be in
the range of breakeven to a $0.03 loss per diluted share.�
Conference Call and Webcast A conference call and simultaneous
webcast to discuss fiscal 2008 fourth quarter and full-year
financial results and business outlook will be held today at 4:30
p.m. Eastern / 1:30 p.m. Pacific. The live webcast of the call is
available on CalAmp's web site at www.calamp.com. Participants are
encouraged to visit the web site at least 15 minutes prior to the
start of the call to register, download and install any necessary
audio software. CalAmp's President and CEO Rick Gold and CFO Rick
Vitelle will host the conference call. After the live webcast, a
replay will remain available until the next quarterly conference
call in the Investor Relations section of CalAmp's web site. About
CalAmp Corp. CalAmp is a leading provider of high value
mission-critical wireless communications solutions that enable
anytime/anywhere access. CalAmp�s Wireless DataCom Division
services the public safety, industrial monitoring and controls, and
mobile resource management market segments with wireless solutions
built on communications technology platforms that include
proprietary licensed narrowband, standards-based unlicensed
broadband and cellular networks. CalAmp�s Satellite Division
supplies outdoor customer premise equipment to the U.S. Direct
Broadcast Satellite (DBS) market. For additional information,
please visit www.calamp.com Forward-Looking Statement Statements in
this press release that are not historical in nature are
forward-looking statements, that involve known and unknown risks
and uncertainties. Words such as "may", "will", "expect", "intend",
"plan", "believe", "seek", "could", "estimate", "judgment",
"targeting", "should", "anticipate", "goal" and variations of these
words and similar expressions, are intended to identify
forward-looking statements. Actual results could differ materially
from those implied by such forward-looking statements due to a
variety of factors, including general and industry economic
conditions, product demand, increased competition, competitive
pricing and continued pricing declines in the DBS market, the
timing of customer approvals of new product designs, operating
costs, the Company's ability to efficiently and cost-effectively
integrate its acquired businesses, the Company�s ability to resume
shipments of certain newer generation products to one of its key
DBS customers, the risk that the ultimate cost of resolving a
product performance issue with that DBS customer may exceed the
amount of reserves established for that purpose, and other risks or
uncertainties that are described in the Company's fiscal 2007
Annual Report on Form 10-K and the Quarterly Reports on Form 10-Q
for the first three quarters of fiscal 2008, all as filed with the
Securities and Exchange Commission. Although the Company believes
the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that
its expectations will be attained. The Company undertakes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
CAL AMP CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in
thousands except per share amounts) � � � � � Three Months Ended
Year Ended � February 28, � February 28, � 2008 � � 2007 � � 2008 �
� 2007 � � Revenues $ 29,785 $ 55,025 $ 140,907 $ 211,714 � Cost of
revenues � 22,247 � � 44,375 � � 122,412 � � 166,279 � � Gross
profit � 7,538 � � 10,650 � � 18,495 � � 45,435 � � Operating
expenses: Research and development 3,728 3,466 15,710 12,989
Selling 3,414 2,082 10,633 6,765 General and administrative 4,809
2,375 14,966 9,792 Intangible asset amortization 1,558 1,077 6,418
3,463 In-process research and development - - 310 6,850 Impairment
loss � 5,531 � � - � � 71,276 � � - � � 19,040 � � 9,000 � �
119,313 � � 39,859 � � Operating income (loss) (11,502 ) 1,650
(100,818 ) 5,576 � Non-operating income (expense), net � (760 ) � -
� � (2,472 ) � 591 � � Income (loss) from continuing operations
before income taxes (12,262 ) 1,650 (103,290 ) 6,167 � Income tax
benefit (provision) � 3,046 � � 73 � � 20,940 � � (4,716 ) � Income
(loss) from continuing operations (9,216 ) 1,723 (82,350 ) 1,451 �
Loss from discontinued operations, net of tax - (991 ) (597 )
(32,639 ) (a) � Loss on sale of discontinued operations, net of tax
� (267 ) � - � � (1,202 ) � - � � Net income (loss) $ (9,483 ) $
732 � $ (84,149 ) $ (31,188 ) � � Basic and diluted earnings (loss)
per share: Income (loss) from continuing operations $ (0.37 ) $
0.07 $ (3.45 ) $ 0.06 Loss from discontinued operations � (0.01 ) �
(0.04 ) � (0.08 ) � (1.40 ) � Total basic and diluted earnings
(loss) per share $ (0.38 ) $ 0.03 � $ (3.53 ) $ (1.34 ) � � Shares
used in per share calculations: Basic 24,660 23,548 23,881 23,353
Diluted 24,660 23,868 23,881 23,353 � � (a) Includes a goodwill and
intangible asset impairment charge of $29.8 million on discontinued
operations in the fiscal 2007 first quarter. CAL AMP CORP. BUSINESS
SEGMENT INFORMATION (Unaudited, in thousands except per share
amounts) � � � � � Three Months Ended Year Ended � February 28, �
February 28, � 2008 � � 2007 � � 2008 � � 2007 � Revenue Satellite
Division $ 9,255 $ 37,036 $ 50,490 $ 155,127 Wireless DataCom
Division � 20,530 � � 17,989 � � 90,417 � � 56,587 � � Total
revenue $ 29,785 � $ 55,025 � $ 140,907 � $ 211,714 � � Gross
profit (loss) Satellite Division $ 722 $ 3,841 $ (14,808 ) (a) $
23,402 Wireless DataCom Division � 6,816 � � 6,809 � � 33,303 � �
22,033 � � Total gross profit $ 7,538 � $ 10,650 � $ 18,495 � $
45,435 � � Operating income (loss) Satellite Division $ (1,568 )
(a) (b) $ 2,505 $ (63,924 ) (a) (b) $ 17,317 Wireless DataCom
Division (7,485 ) (c) 599 (30,473 ) (c) (5,888 ) (d) Corporate
expenses � (2,449 ) � (1,454 ) � (6,421 ) � (5,853 ) � Total
operating income (loss) $ (11,502 ) $ 1,650 � $ (100,818 ) $ 5,576
� � � (a) Includes charges for estimated product warranty and
related costs in the three months and year ended February 28, 2008
of $-0- and $17.9 million, respectively. � (b) Includes a Satellite
Division goodwill impairment charge in the three months and year
ended February 28, 2008 of $1.2 million and $44.4 million,
respectively. � (c) Includes a Wireless DataCom Division goodwill
impairment charge in the three months and year ended February 28,
2008 of $4.3 million and $26.9 million, respectively. � (d)
Includes a charge of $6.8 million in the fiscal 2007 first quarter
for the write-off of in-process research and development costs
associated with the acquisition of Dataradio. CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS (Unaudited - In thousands) � � February
28, February 28, � 2008 � � 2007 � Assets Current assets: Cash and
cash equivalents $ 6,588 $ 37,537 Accounts receivable, net 20,043
38,439 Inventories 25,097 25,729 Deferred income tax assets 5,306
4,637 Prepaid expenses and other current assets � 9,733 � � 7,182 �
� Total current assets 66,767 113,524 � Equipment and improvements,
net 5,070 6,308 � Deferred income tax assets, less current portion
14,802 - � Goodwill 28,520 90,001 � Other intangible assets, net
24,424 18,643 � Other assets � 3,458 � � 1,227 � � $ 143,041 � $
229,703 � Liabilities and Stockholders' Equity Current liabilities:
Current portion of long-term debt $ 5,343 $ 2,944 Accounts payable
10,875 26,186 Accrued payroll and employee benefits 4,218 3,478
Accrued warranty costs 3,818 1,295 Other accrued liabilities 11,800
2,799 Deferred revenue � 4,005 � � 1,935 � � Total current
liabilities � 40,059 � � 38,637 � � Long-term debt, less current
portion 27,187 31,314 � Deferred income tax liabilities - 7,451 �
Other non-current liabilities 2,375 1,050 � Stockholders' equity:
Common stock 247 236 Additional paid-in capital 144,321 139,175
Retained earnings (accumulated deficit) (71,149 ) 13,000
Accumulated other comprehensive income (loss) � 1 � � (1,160 ) �
Total stockholders' equity � 73,420 � � 151,251 � � $ 143,041 � $
229,703 � CAL AMP CORP. CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands) � � � Year Ended � February 28, � 2008 �
� 2007 � Cash flows from operating activities: Net loss $ (84,149 )
$ (31,188 ) Depreciation and amortization 9,681 6,920 Stock-based
compensation expense 2,238 2,213 Write-off of in-process research
and development costs 310 6,850 Impairment loss 71,276 29,848
Excess tax benefit from stock-based compensation (65 ) (496 )
Deferred tax assets, net (20,784 ) 1,485 Loss on sale of
discontinued operations, net of tax 1,202 - Gain on sale of
investment (331 ) - Changes in operating working capital 19,087
1,006 Other � (6 ) � 85 � � Net cash provided (used) by operating
activities � (1,541 ) � 16,723 � � Cash flows from investing
activities: Capital expenditures (1,359 ) (2,828 ) Proceeds from
sale of property and equipment 7 16 Proceeds from sale of
investment 1,045 - Proceeds from sale of discontinued operations
4,420 - Acquisition of Aercept (19,318 ) - Acquisition of SmartLink
(7,845 ) - Acquisition of Dataradio net of cash acquired - (48,053
) Acquisition of TechnoCom product line (985 ) (2,486 ) Proceeds
from Vytek escrow distribution - 480 Other � - � � (240 ) � Net
cash used in investing activities � (24,035 ) � (53,111 ) � Cash
flows from financing activities: Proceeds from long-term debt -
38,000 Debt repayments (6,728 ) (11,421 ) Proceeds from stock
option exercises 213 1,397 Excess tax benefit from stock-based
compensation � 65 � � 496 � � Net cash provided (used) by financing
activities � (6,450 ) � 28,472 � � Effect of exchange rate changes
on cash � 1,077 � � (330 ) � Net change in cash and cash
equivalents (30,949 ) (8,246 ) � Cash and cash equivalents at
beginning of period � 37,537 � � 45,783 � � Cash and cash
equivalents at end of period $ 6,588 � $ 37,537 � CAL AMP CORP.
NON-GAAP EARNINGS RECONCILIATION (Unaudited, in thousands except
per share amounts) � � Non-GAAP Earnings Reconciliation "GAAP"
refers to financial information presented in accordance with
Generally Accepted Accounting Principles in the United States. This
press release includes historical non-GAAP financial measures, as
defined in Regulation G promulgated by the Securities and Exchange
Commission. CalAmp believes that its presentation of historical
non-GAAP financial measures provides useful supplementary
information to investors. The presentation of historical non-GAAP
financial measures is not meant to be considered in isolation from
or as a substitute for results prepared in accordance with
accounting principles generally accepted in the United States. � In
this press release, CalAmp reports the non-GAAP financial measures
of Adjusted Basis Income (Loss) from Continuing Operations and
Diluted Income (Loss) from Continuing Operations Per Share. CalAmp
uses these non-GAAP financial measures to enhance the investor's
overall understanding of the financial performance and future
prospects of CalAmp's core business activities. Specifically,
CalAmp believes that a report of Adjusted Basis Income (Loss) from
Continuing Operations and Diluted Income (Loss) from Continuing
Operations Per Share provides consistency in its financial
reporting and facilitates the comparison of results of core
business operations between its current and past periods. � The
reconciliation of the GAAP Basis Income (Loss) from Continuing
Operations to Adjusted Basis Income (Loss) from Continuing
Operations is as follows: � Three Months Ended Year Ended �
February 28, � February 28, � 2008 � � 2007 � 2008 � � 2007 � �
GAAP Basis Income (Loss) from Continuing Operations $ (9,216 ) $
1,723 $ (82,350 ) $ 1,451 � Adjustments to reconcile to Adjusted
Basis Income (Loss) from Continuing Operations: Amortization of
intangible assets, net of tax 953 687 3,925 2,208 Stock-based
compensation expense, net of tax 387 312 1,317 1,153 In-process
R&D, net of tax in fiscal 2008 - - 190 6,850 Impairment loss,
net of tax on deductible portion 5,069 - 62,776 - � � � � � � � � �
Adjusted Basis Income (Loss) from Continuing Operations $ (2,807 )
$ 2,722 $ (14,142 ) $ 11,662 � � Adjusted Basis Income (Loss) from
Continuing Operations per diluted share $ (0.11 ) $ 0.11 $ (0.59 )
$ 0.50 � � Weighted average common shares outstanding on diluted
basis 24,660 23,868 23,881 23,353 � Reconciling items that are not
treated as tax deductible in computing the GAAP basis income tax
provision (in-process research and development in fiscal 2007 and
the nondeductible portion of the impairment charge in fiscal 2008)
are not tax-effected in the Non-GAAP Earnings Reconciliation. The
remaining reconciling items are tax-effected using an adjusted
year-to-date effective income tax rate that is computed by
excluding from pretax income (loss) those reconciling items that
are not treated as tax deductible in computing the GAAP basis
income tax provision. The computation of the adjusted year-to-date
effective income tax rate is as follows: � Year Ended � February
28, � 2008 � � 2007 � Pretax income (loss) from continuing
operations, as reported $ (103,290 ) $ 6,167 Add back nondeductible
items: In-process research and development in fiscal 2007 - 6,850
Nondeductible portion of impairment loss 49,397 � - � � Pretax
income (loss) from continuing operations before nondeductible items
(53,893 ) 13,017 Income tax benefit (provision) as reported 20,940
� (4,716 ) � Year-to-date effective income tax rate as adjusted
38.9 % 36.2 %
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