CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless
products, services and solutions, today reported results for its
fourth quarter and full year ended February 28, 2010. Key elements
include:
-- Fourth quarter revenue of $34.5 million, up 62% from prior year and
up 12% sequentially; fiscal 2010 full year revenue of $112.1 million,
up 14% from prior year.
-- Fourth quarter GAAP net loss of $1.3 million, or $0.05 loss per
diluted share; Adjusted basis (non-GAAP) net loss of $0.5 million, or
$0.02 loss per diluted share.
-- Full year operating cash inflow of $2.5 million.
-- Fiscal 2010 ending total debt balance of $10.1 million, down from
$21.1 million at prior year end.
Rick Gold, CalAmp's Chief Executive Officer, commented, "With
fourth quarter revenues increasing 62% year-over-year and 12%
sequentially, we had a strong finish to fiscal 2010. During this
past year the Company achieved three important milestones. First,
we re-established the competitive position of our satellite
products business and returned it to operating profitability during
the second half of the year. Second, we stabilized and repositioned
our wireless datacom business for growth resulting in strong recent
new orders and fourth quarter revenues showing 14% sequential
growth. Finally, we significantly enhanced our liquidity position
with the successful refinancing of our maturing bank debt. As we
look ahead to fiscal 2011 and beyond, we believe that we can
achieve profitable growth with innovative products addressing
attractive wireless markets."
Fiscal 2010 Fourth Quarter Results
Total revenue for the fiscal 2010 fourth quarter was $34.5
million compared to $21.3 million for the fourth quarter of fiscal
2009. The year-over-year increase in revenues was due to higher
sales in both of the Company's satellite and wireless datacom
business segments.
Consolidated gross profit for the fiscal 2010 fourth quarter was
$7.0 million or 20.2% of revenue compared to gross profit of $13.6
million or 63.7% of revenue, for the same period last year.
Included in gross profit in the fiscal 2009 fourth quarter was a
$9.0 million gain from the settlement of litigation with Rogers
Corporation. Excluding the litigation settlement, fiscal 2009
fourth quarter gross profit was $4.6 million, or 21.5% of revenue.
The 52% increase in gross profit in the latest quarter over the
fourth quarter of last year (excluding the Rogers litigation
settlement) is due to the year-over-year revenue increase.
Results of operations for the fiscal 2010 fourth quarter as
determined in accordance with U.S. generally accepted accounting
principles ("GAAP") was a net loss of $1.3 million or $0.05 loss
per diluted share. This compares to a net loss of $45.8 million or
$1.85 loss per diluted share in the fourth quarter of last year.
The fiscal 2009 fourth quarter net loss was primarily attributable
to a $44.7 million impairment charge.
The Adjusted Basis (non-GAAP) net loss for the fiscal 2010
fourth quarter was $0.5 million, or $0.02 loss per diluted share,
compared to Adjusted Basis net income of $3.0 million or $0.12 per
diluted share for the same period last year. Adjusted Basis net
income (loss) excludes the impact of impairment charges,
amortization of intangible assets and stock-based compensation
expense, and includes an income tax provision or benefit computed
without giving effect to increases or decreases in the deferred
income tax valuation allowance that are recognized for GAAP-basis
financial reporting. A reconciliation of the GAAP basis pretax loss
to Adjusted Basis net income (loss) is provided in the table at the
end of this press release.
Liquidity
At February 28, 2010, the Company had total cash of $3.0 million
and $10.1 million in total debt. Total debt at that date consists
of $5.9 million drawn under the Company's revolving bank credit
facility and the $4.2 million carrying amount of subordinated debt.
The unused borrowing capacity on the bank revolver was $6.1 million
at February 28, 2010. Net cash provided by operating activities was
$2.5 million for fiscal 2010.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "We
expect consolidated revenues for fiscal 2011 as a whole will
increase in the range of 10% to 20% over fiscal 2010 with growth in
both our satellite and wireless datacom businesses. Our satellite
business is expected to benefit from the launch of several new
products currently in development that should expand our served
market and improve our gross profit margin. In addition, recent
orders for wireless datacom products and a healthy pipeline of new
opportunities have set the stage for growth to continue in fiscal
2011. We expect consolidated gross margin for fiscal 2011 as a
whole will be in the range of 23% to 27% of revenue, and we expect
fiscal 2011 total operating expenses will remain flat compared to
fiscal 2010. Looking further ahead, we believe that we can achieve
an annual revenue run rate greater than $200 million within the
next two years, balanced between our satellite and wireless datacom
businesses."
Mr. Gold concluded, "While we expect revenues to increase over
the course of fiscal 2011, given the nature of demand in both of
our business segments, this growth is not expected to occur in a
smooth and linear pattern. Based on current projections, we expect
fiscal 2011 first quarter consolidated revenues will be up
year-over-year but down on a sequential quarter basis and be in the
range of $24 to $27 million, primarily due to lower sales in our
satellite products business. We expect a GAAP basis net loss in the
range of $0.08 to $0.12 per diluted share. The Adjusted Basis net
loss for the first quarter, which excludes intangibles amortization
expense and stock-based compensation expense, is expected to be in
the range of a $0.03 to $0.07 loss per diluted share."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal
2010 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. CalAmp's CEO Rick Gold and CFO Rick Vitelle will host the
conference call. Participants can dial into the live conference
call by calling 877-941-8632 (480-629-9821 for international
callers). An audio replay will be available through May 13, 2010,
by calling 800-406-7325 (303-590-3030 for international callers)
and entering the access code 4291490.
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. 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,
and other risks or uncertainties that are described in the
Company's Report on Form 10-K for fiscal 2010 as filed today 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
(In thousands except per share amounts)
Three Months Ended Year Ended
February 28, February 28,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
Revenues $ 34,481 $ 21,327 $ 112,113 $ 98,370
Cost of revenues 27,499 7,739 (a) 89,723 60,244 (a)
--------- --------- --------- ---------
Gross profit 6,982 13,588 22,390 38,126
--------- --------- --------- ---------
Operating expenses:
Research and development 2,686 3,369 10,943 12,899
Selling 2,422 2,384 9,542 8,959
General and
administrative 2,512 2,735 10,523 12,087
Intangible asset
amortization 342 617 1,367 4,429
Impairment loss - 44,736 - 44,736
--------- --------- --------- ---------
7,962 53,841 32,375 83,110
--------- --------- --------- ---------
Operating loss (980) (40,253) (9,985) (44,984)
Non-operating expense, net (352) 361 (2,240) (911)
--------- --------- --------- ---------
Loss before income taxes (1,332) (39,892) (12,225) (45,895)
Income tax benefit
(provision) - (5,940) 1,374 (3,770)
--------- --------- --------- ---------
Net loss $ (1,332) $ (45,832) $ (10,851) $ (49,665)
========= ========= ========= =========
Basic and diluted loss
per share $ (0.05) $ (1.85) $ (0.43) $ (2.01)
========= ========= ========= =========
Shares used in basic and
diluted per share
calculations 26,442 24,810 25,309 24,765
(a) Includes a $9 million gain from a legal settlement with Rogers
Corporation in January 2009.
CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(In thousands)
Three Months Ended Year Ended
February 28, February 28,
---------------------- ----------------------
2010 2009 2010 2009
--------- --------- --------- ---------
Revenue
Satellite $ 18,700 $ 8,126 $ 54,715 $ 26,327
Wireless
DataCom 15,781 13,201 57,398 72,043
--------- --------- --------- ---------
Total
revenue $ 34,481 $ 21,327 $ 112,113 $ 98,370
========= ========= ========= =========
Gross profit
Satellite $ 1,853 $ 9,349 (a) $ 4,258 $ 10,254 (a)
Wireless
DataCom 5,129 4,239 18,132 27,872
--------- --------- --------- ---------
Total gross
profit $ 6,982 $ 13,588 $ 22,390 $ 38,126
========= ========= ========= =========
Operating income
(loss)
Satellite $ 740 $ 6,110 (a)(b)$ (111) $ 3,616 (a)(b)
Wireless
DataCom (1,076)(c) (43,886)(d)(e) (5,867)(c) (42,206)(d)(e)
Corporate
expenses (644) (2,477)(f) (4,007) (6,394)(f)
--------- --------- --------- ---------
Total
operating
loss $ (980) $ (40,253) $ (9,985) $ (44,984)
========= ========= ========= =========
(a) Includes a $9 million gain from a legal settlement with Rogers
Corporation in January 2009.
(b) Includes a Satellite segment goodwill impairment charge of $2.3
million for the three months and year ended February 28, 2009.
(c) Includes intangible asset amortization expense in the three months and
year ended February 28, 2010 of $0.3 million and $1.4 million,
respectively.
(d) Includes a Wireless DataCom segment impairment charge of $41.3 million
for the three months and year ended February 28, 2009.
(e) Includes intangible asset amortization expense in the three months and
year ended February 28, 2009 of $0.6 million and $4.4 million,
respectively.
(f) Includes an impairment charge on investment in preferred stock of a
privately held company of $1.1 million for the three months and year
ended February 28, 2009.
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands)
February 28, February 28,
2010 2009
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 2,986 $ 6,913
Accounts receivable, net 16,520 13,682
Inventories 10,608 15,139
Deferred income tax assets 2,656 3,479
Prepaid expenses and other current assets 4,720 4,962
---------- ----------
Total current assets 37,490 44,175
Equipment and improvements, net 2,055 2,139
Deferred income tax assets, less current portion 10,017 13,111
Intangible assets, net 5,144 6,473
Other assets 2,247 3,749
---------- ----------
$ 56,953 $ 69,647
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt $ 5,901 $ 21,078
Accounts payable 16,186 5,422
Accrued payroll and employee benefits 2,742 3,380
Deferred revenue 4,740 3,609
Other current liabilities 3,526 11,969
---------- ----------
Total current liabilities 33,095 45,458
---------- ----------
Long-term debt 4,170 -
Other non-current liabilities 489 990
Stockholders' equity:
Common stock 277 252
Additional paid-in capital 151,453 144,881
Accumulated deficit (131,665) (120,814)
Accumulated other comprehensive loss (866) (1,120)
---------- ----------
Total stockholders' equity 19,199 23,199
---------- ----------
$ 56,953 $ 69,647
========== ==========
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
Year Ended
February 28,
----------------------
2010 2009
---------- ----------
Cash flows from operating activities:
Net loss $ (10,851) $ (49,665)
Depreciation and amortization 2,522 6,549
Stock-based compensation expense 1,981 1,268
Impairment loss - 44,736
Loss on sale of investment 1,008 -
Deferred tax assets, net 39 3,373
Changes in operating working capital 7,669 7,499
Other 104 -
---------- ----------
Net cash provided by operating activities 2,472 13,760
---------- ----------
Cash flows from investing activities:
Capital expenditures (1,066) (831)
Proceeds from sale of investment 992 -
Collections on note receivable 325 465
Earnout payments on TechnoCom acquisition - (1,183)
Other (36) 108
---------- ----------
Net cash provided (used) by investing
activities 215 (1,441)
---------- ----------
Cash flows from financing activities:
Proceeds from borrowings on lines of credit 7,551 -
Proceeds from issuance of subordinated debt 5,000 -
Net proceeds from sale of common stock 3,968 -
Debt repayments (22,728) (11,452)
Payment of debt issue costs (544) -
---------- ----------
Net cash used in financing activities (6,753) (11,452)
---------- ----------
Effect of exchange rate changes on cash 139 (542)
---------- ----------
Net change in cash and cash equivalents (3,927) 325
Cash and cash equivalents at beginning of period 6,913 6,588
---------- ----------
Cash and cash equivalents at end of period $ 2,986 $ 6,913
========== ==========
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 Income (Loss) and Adjusted Basis Net Income (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 Income (Loss) and
Adjusted Basis Net Income (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 Pretax Loss to Adjusted Basis
(non-GAAP) Net Income (Loss) is as follows:
Three Months Ended Year Ended
February 28, February 28,
---------------------- -------------------------
2010 2009 2010 2009
--------- --------- --------- ---------
GAAP Basis Pretax
Loss $ (1,332) $ (39,892) $ (12,225) $ (45,895)
Amortization of
intangible assets 342 617 1,367 4,429
Stock-based
compensation
expense 565 430 1,981 1,268
Impairment charge - 44,736 - 44,736
--------- --------- --------- ---------
Pretax income
(loss) (non-GAAP
Basis) (425) 5,891 (8,877) 4,538
Income tax benefit
(provision)
(non-GAAP basis) (29)(a) (2,868)(a) 3,919 (a)(b) (2,868)(a)
Adjusted Basis
(non-GAAP) Net
Income (Loss) $ (454) $ 3,023 $ (4,958) $ 1,670
========= ========= ========= =========
Adjusted Basis Net
Income (Loss) Per
Diluted Share $ (0.02) $ 0.12 $ (0.20) $ 0.07
Weighted average
common shares
outstanding
on diluted basis 26,442 24,810 25,309 24,765
(a) The non-GAAP income tax benefit (provision) is computed using the
Company's combined U.S. federal and state statutory tax rate of
40.7%, excluding the pretax losses of foreign operations for which
no income tax benefit is recognized and excluding the effects of
increases and decreases in the deferred income tax valuation
allowance.
(b) Amount includes an income tax benefit of $1.4 million that was
recognized in the fiscal 2010 third quarter as a result of the
reversal of an uncertain tax position which was resolved.
AT THE COMPANY: Rick Vitelle Chief Financial Officer (805)
987-9000 AT FINANCIAL RELATIONS BOARD: Lasse Glassen General
Information (213) 486-6546 lglassen@mww.com
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