CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless
products, services and solutions, today reported results for its
fiscal 2010 second quarter ended August 31, 2009. Key elements
include:
-- Consolidated second quarter revenues of $23.9 million, within guidance
and 4% higher than prior quarter.
-- Second quarter GAAP net loss of $4.2 million, or $0.17 per diluted
share; Adjusted basis (non-GAAP) loss of $2.3 million or $0.09 per diluted
share. Included in the GAAP and adjusted basis loss is a $1 million pre-tax
charge (or $0.04 per diluted share on a GAAP basis and $0.02 per diluted
share on an adjusted basis) related to a loss on the sale of preferred
stock in a privately held company.
-- Second quarter net cash provided by operations of $2.9 million.
-- Total debt balance reduced by $3.6 million in second quarter to $14.4
million.
Rick Gold, CalAmp's President and Chief Executive Officer,
commented, "I am pleased by our ability to continue growing revenue
and generating operating cash flow in this challenging economic
environment. Our second sequential quarter of top line growth was
driven by the continued ramp of unit volumes in our satellite
products business, which showed an 8% increase in revenues over the
previous quarter, and a 2% sequential revenue growth in our
wireless datacom business. Looking ahead, I am encouraged by the
strong demand we are seeing for our satellite products in the
second half of FY10, and the expanding pipeline of new business
opportunities in our wireless datacom business."
Mr. Gold continued, "In addition, we remain committed to
improving our balance sheet and enhancing our financial
flexibility. During the second quarter, our focus on working
capital management helped generate $2.9 million in cash flow from
operations, and we reduced total debt by $3.6 million to a balance
of $14.4 million."
Fiscal 2010 Second Quarter Results
Total revenue for the fiscal 2010 second quarter was $23.9
million compared to $23.3 million for the second quarter of fiscal
2009. The year-over-year increase in revenues was due primarily to
higher sales of the Company's satellite products, partially offset
by lower sales of its wireless datacom products.
Gross profit for the fiscal 2010 second quarter was $4.8 million
or 20.1% of revenues compared to gross profit of $7.5 million or
32.0% of revenue for the same period last year. The reduction in
gross profit and gross margin percentage in the latest quarter was
due primarily to lower wireless datacom revenues.
Results of operations for the fiscal 2010 second quarter as
determined in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP") was a net loss of $4.2 million or $0.17 loss
per diluted share. This compares to a net loss of $1.5 million or
$0.06 loss per diluted share in the second quarter of last
year.
The Adjusted Basis (non-GAAP) net loss for the fiscal 2010
second quarter was $2.3 million or $0.09 loss per diluted share
compared to Adjusted Basis net loss of $0.6 million or $0.02 loss
per diluted share for the same period last year. The Adjusted Basis
net loss excludes the impact of changes in the deferred income tax
asset valuation allowance, amortization of intangible assets and
stock-based compensation expense, each net of tax to the extent
applicable. A reconciliation of the GAAP basis net loss to Adjusted
Basis net loss is provided in the table at the end of this press
release.
Included in the second quarter GAAP and Adjusted Basis net loss
is a pre-tax loss of approximately $1 million related to the sale
of preferred stock in a privately-held company. Net of tax, this
amounted to $0.04 per diluted share on a GAAP basis and $0.02 per
diluted share on an Adjusted Basis Pursuant to CalAmp's bank credit
agreement, $1 million, representing substantially all of the net
proceeds of this asset sale, was applied to the outstanding balance
of CalAmp's bank term loan.
Liquidity
At August 31, 2009, the Company had total cash of $4.4 million,
with $14.0 million in total outstanding bank debt and a $0.4
million note payable to a key Direct Broadcast Satellite ("DBS")
customer. Net cash provided by operating activities was $2.9
million for the three months ended August 31, 2009. During the
latest quarter, the principal on the Company's bank loan was paid
down by $1.8 million and the principal on the note payable to the
DBS customer was also paid down by $1.8 million.
The Company's bank term loan has a maturity date of December 31,
2009, and consequently the entire term loan balance is classified
as a current liability in the Consolidated Balance Sheet at August
31, 2009. The Company is currently in active discussions with
several banks, and expects to refinance the term loan prior to the
end of calendar 2009 from the proceeds of an asset-based loan,
possibly supplemented by proceeds from other funding sources. The
Company also expects to retire the note payable to a key DBS
customer during the fiscal third quarter.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "We
are experiencing a sharp increase in demand for our satellite
products in the second half of fiscal 2010. We expect to see fiscal
third quarter consolidated revenues increase significantly on a
sequential quarter basis and be in the range of $29 to $32 million,
with a GAAP basis net loss in the range of $0.03 to $0.07 per
diluted share. The Adjusted Basis (non-GAAP) results of operations
for the third quarter, which exclude changes in the valuation
allowance for U.S. deferred tax assets, intangibles amortization
expense net of tax and stock-based compensation expense net of tax,
are expected to be in the range of $0.04 net loss to breakeven.
With the increased demand and strong operating momentum we expect
further growth in the fiscal 2010 fourth quarter with consolidated
revenues in the $34 to $38 million range and GAAP-basis
profitability."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal
2010 second quarter financial results and business outlook will be
held today at 4:30 p.m. Eastern / 1:30 p.m. Pacific. CalAmp's
President and CEO Rick Gold and CFO Rick Vitelle will host the
conference call. Participants can dial into the live conference
call by calling 877-941-6009 (480-629-9771 for international
callers). An audio replay will be available through October 15,
2009, by calling 800-406-7325 (303-590-3030 for international
callers) and entering the access code 4168016.
Additionally, a 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. 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 provides wireless communications solutions that enable
anytime/anywhere access to critical data and content. The Company
serves customers in the public safety, industrial monitoring and
controls, mobile resource management and direct broadcast satellite
markets. The Company's products are marketed under the CalAmp,
Dataradio, SmartLink, Aercept, LandCell and Omega trade names. For
more information, please visit www.calamp.com.
Forward-Looking Statements
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 product demand, competitive
pressures and pricing declines in the Company's satellite and
wireless markets, the timing of customer approvals of new product
designs, the length and extent of the global economic downturn that
has and may continue to adversely affect the Company's business,
the Company's ability to refinance or extend its bank term loan
prior to the December 31, 2009 maturity date, and other risks or
uncertainties that are described in the Company's Annual Report on
Form 10-K for fiscal 2009 as filed on May 12, 2009 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.
-Financial Tables to Follow-
CAL AMP CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenues $ 23,940 $ 23,308 $ 46,940 $ 51,209
Cost of revenues 19,136 15,840 37,429 34,312
-------- -------- -------- --------
Gross profit 4,804 7,468 9,511 16,897
-------- -------- -------- --------
Operating expenses:
Research and development 2,633 3,131 5,531 6,331
Selling 2,402 1,647 4,603 3,919
General and administrative 2,501 3,266 5,258 6,362
Intangible asset amortization 342 1,240 683 2,572
-------- -------- -------- --------
7,878 9,284 16,075 19,184
-------- -------- -------- --------
Operating loss (3,074) (1,816) (6,564) (2,287)
Non-operating expense, net (1,169) (334) (1,636) (750)
-------- -------- -------- --------
Loss before income taxes (4,243) (2,150) (8,200) (3,037)
Income tax benefit - 652 - 1,042
-------- -------- -------- --------
Net loss $ (4,243) $ (1,498) $ (8,200) $ (1,995)
======== ======== ======== ========
Basic and diluted loss per share $ (0.17) $ (0.06) $ (0.33) $ (0.08)
======== ======== ======== ========
Shares used in basic and diluted
per share calculations 24,918 24,737 24,889 24,720
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue
Satellite $ 9,964 $ 3,176 $ 19,213 $ 10,817
Wireless DataCom 13,976 20,132 27,727 40,392
-------- -------- -------- --------
Total revenue $ 23,940 $ 23,308 $ 46,940 $ 51,209
======== ======== ======== ========
Gross profit
Satellite $ 331 $ (81) $ 758 $ 652
Wireless DataCom 4,473 7,549 8,753 16,245
-------- -------- -------- --------
Total gross profit $ 4,804 $ 7,468 $ 9,511 $ 16,897
======== ======== ======== ========
Operating income (loss)
Satellite $ (728) $ (1,324) $ (1,345) $ (1,656)
Wireless DataCom (1,299) 916 (2,943) 1,973
Corporate expenses (1,047) (1,408) (2,276) (2,604)
-------- -------- -------- --------
Total operating loss $ (3,074) $ (1,816) $ (6,564) $ (2,287)
======== ======== ======== ========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2009 2009
----------- ------------
Assets
Current assets:
Cash and cash equivalents $ 4,401 $ 6,913
Accounts receivable, net 12,178 13,682
Inventories 11,671 15,139
Deferred income tax assets 3,274 3,479
Prepaid expenses and other current assets 4,253 4,962
----------- ------------
Total current assets 35,777 44,175
Equipment and improvements, net 2,085 2,139
Deferred income tax assets, less current portion 13,252 13,111
Other intangible assets, net 5,828 6,473
Other assets 1,783 3,749
----------- ------------
$ 58,725 $ 69,647
=========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Bank loan payable $ 13,985 $ 17,550
Subordinated note payable 410 3,528
Accounts payable 10,746 5,422
Accrued payroll and employee benefits 2,630 3,380
Accrued warranty costs 2,657 3,286
Other accrued liabilities 7,553 8,683
Deferred revenue 3,853 3,609
----------- ------------
Total current liabilities 41,834 45,458
----------- ------------
Non-current liabilities 975 990
Stockholders' equity:
Common stock 257 252
Additional paid-in capital 145,537 144,881
Accumulated deficit (129,014) (120,814)
Accumulated other comprehensive loss (864) (1,120)
----------- ------------
Total stockholders' equity 15,916 23,199
----------- ------------
$ 58,725 $ 69,647
=========== ============
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
----------------------
2009 2008
---------- ----------
Cash flows from operating activities:
Net loss $ (8,200) $ (1,995)
Depreciation and amortization 1,283 3,770
Stock-based compensation expense 858 361
Loss on sale of investment 1,008 -
Deferred tax assets, net - (1,046)
Changes in operating working capital 8,462 (376)
Other 23 -
---------- ----------
Net cash provided by operating activities 3,434 714
---------- ----------
Cash flows from investing activities:
Capital expenditures (544) (561)
Proceeds from sale of investment 992 -
Collections on note receivable 150 420
Earnout payments on TechnoCom acquisition - (872)
Other (36) 296
---------- ----------
Net cash provided (used) by investing
activities 562 (717)
---------- ----------
Cash flows from financing activities:
Proceeds from line of credit borrowing 1,000 -
Debt repayments (7,683) (1,500)
---------- ----------
Net cash used in financing activities (6,683) (1,500)
---------- ----------
Effect of exchange rate changes on cash 175 (388)
---------- ----------
Net change in cash and cash equivalents (2,512) (1,891)
Cash and cash equivalents at beginning of period 6,913 6,588
---------- ----------
Cash and cash equivalents at end of period $ 4,401 $ 4,697
========== ==========
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 GAAP.
In this press release, CalAmp reports the non-GAAP financial
measures of Adjusted Basis Net Loss and Adjusted Basis Net Loss Per
Diluted 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 Net Loss and Adjusted Basis Net Loss Per Diluted 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 Net Loss to Adjusted Basis
(non-GAAP) Net Loss is as follows:
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
GAAP Basis Net Loss $ (4,243) $ (1,498) $ (8,200) $ (1,995)
Adjustments to reconcile to
Adjusted Basis Net Loss:
Increase in valuation allowance
for U.S. deferred tax assets 1,473 - 2,597 -
Amortization of intangible
assets, net of tax (1) 203 720 405 1,494
Stock-based compensation
expense, net of tax (1) 264 205 509 210
-------- -------- -------- --------
Adjusted Basis Net Loss $ (2,303) $ (573) $ (4,689) $ (291)
======== ======== ======== ========
Adjusted Basis Net Loss Per Diluted
Share $ (0.09) $ (0.02) $ (0.19) $ (0.01)
Weighted average common shares
Outstanding on diluted basis 24,918 24,737 24,889 24,720
(1) These reconciling items are tax effected using the Company's combined
U.S. federal and state statutory tax rate of 40.7% and 41.9% for the
six months ended August 31, 2009 and 2008, respectively.
AT THE COMPANY: Rick Vitelle Chief Financial Officer (805)
987-9000 AT FINANCIAL RELATIONS BOARD: Lasse Glassen General
Information (213) 486-6546 Email Contact
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