CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless
products, services and solutions, today reported results for its
fiscal second quarter ended August 31, 2010. Key elements include:
-- Revenue of $29.5 million, up 23.2% from prior year and at high end of
guidance range.
-- Consolidated gross margin percentage of 25.0%, up from 20.1% in prior
year.
-- GAAP net loss of $0.9 million, or $0.03 loss per diluted share, better
than guidance; Adjusted Basis (non-GAAP) net loss of $0.2 million, or
$0.01 loss per diluted share, at high end of guidance range.
-- Second quarter net cash provided by operations of $0.4 million.
Rick Gold, CalAmp's Chief Executive Officer, commented, "We made
significant progress in the second quarter with consolidated
revenue increasing 23% year-over-year and 12% on a sequential
quarter basis. We are experiencing particularly strong growth in
our wireless datacom business with record revenues of mobile
resource management (MRM) products in the quarter and record
backlog of wireless network products at the end of the quarter.
Demand for our MRM products is increasing in fleet tracking, school
bus tracking, trailer tracking and other emerging applications. In
addition, we are building momentum in the utility sector where we
are now engaged in more than two dozen new Smart Grid
infrastructure pilot projects. Based on the strong second quarter
revenue, our wireless datacom segment generated positive operating
income for the first time in nearly two years. Our Satellite
segment also posted improvements in the second quarter in revenue
and operating profitability on both a sequential and a
year-over-year basis."
Fiscal 2011 Second Quarter Results
Total revenue for the fiscal 2011 second quarter was $29.5
million compared to $23.9 million for the second quarter of fiscal
2010. The year-over-year increase in revenues was due to higher
sales in both the Company's wireless datacom and satellite business
segments. Wireless datacom revenue increased 29.3% to $18.1 million
from $14.0 million in the same period last year, while satellite
revenue increased 14.6% to $11.4 million from $10.0 million in the
same period last year.
Consolidated gross profit for the fiscal 2011 second quarter was
$7.4 million or 25.0% of revenue compared to gross profit of $4.8
million or 20.1% of revenue for the same period last year. The
increase in gross profit and gross margin percentage in the latest
quarter were due primarily to higher wireless datacom revenues.
Results of operations for the fiscal 2011 second quarter as
determined in accordance with U.S. generally accepted accounting
principles ("GAAP") was a net loss of $0.9 million or $0.03 per
diluted share, compared to a net loss of $4.2 million or $0.17 per
diluted share in the second quarter of last year.
The Adjusted Basis (non-GAAP) net loss for the fiscal 2011
second quarter was $0.2 million, or $0.01 loss per diluted share,
compared to an Adjusted Basis net loss of $2.3 million or $0.09
loss per diluted share for the same period last year. The Adjusted
Basis net loss excludes the impact of amortization of intangible
assets and stock-based compensation expense, and includes an income
tax 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 the Adjusted Basis net loss is
provided in the table at the end of this press release.
Liquidity
At the end of the second quarter, the Company had total cash of
$4.1 million and total debt of $12.1 million. Total debt at that
date consisted of $7.8 million drawn under the Company's revolving
bank credit facility and subordinated debt of $4.3 million. The
unused borrowing capacity on the bank revolver was $2.4 million at
August 31, 2010. Net cash provided by operating activities was $0.4
million during the second quarter of fiscal 2011.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said,
"Based on our most recent projections, we expect fiscal 2011 third
quarter consolidated revenues will be in the range of $28 to $32
million, with GAAP Basis per share results in the range of
breakeven to a net loss of $0.04 per diluted share. The Adjusted
Basis income (loss) per share for the third quarter, which excludes
intangibles amortization expense and stock-based compensation
expense, is expected to be in the range of $0.02 net income to
$0.02 net loss per diluted share."
Mr. Gold added, "Looking at the full year, our wireless datacom
segment revenue is experiencing faster growth than our expectations
at the beginning of the year. However, because of some program
delays, we do not expect our satellite segment revenue to show the
level of growth we had previously expected in the third and fourth
quarters. We now believe that full-year fiscal 2011 consolidated
revenues will be in the range of $115 to $125 million, which
includes expected year-over-year growth in wireless datacom
revenues of approximately 25%. Consolidated gross margin for fiscal
2011 as a whole is expected to be in the range of 24% to 27% of
revenue, while total operating expenses for fiscal 2011 are
expected to be flat to slightly lower compared to fiscal 2010. We
expect the full year GAAP basis net loss to be in the range of
$0.08 to $0.16 per diluted share and Adjusted Basis income (loss)
in the range of $0.03 net income to $0.05 net loss per diluted
share. Looking further ahead, we believe the R&D investments we
have made in key growth markets including Smart Grid communications
are beginning to bear fruit and position us well for future
growth."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal
2011 second quarter 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
877-941-8609 (480-629-9818 for international callers). An audio
replay will be available through October 13, 2010, by calling
800-406-7325 (303-590-3030 for international callers) and entering
the access code 4370173.
Additionally, a live webcast of the call will be 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
CalAmp develops and markets wireless communications solutions
that deliver data, voice and video for critical networked
communications and other applications. The Company's two business
segments are Wireless DataCom, which serves utility, governmental
and enterprise customers, and Satellite, which focuses on the North
American Direct Broadcast Satellite market. 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 on May 6,
2010 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 Six Months Ended
August 31, August 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenues $ 29,490 $ 23,940 $ 55,836 $ 46,940
Cost of revenues 22,122 19,136 42,345 37,429
-------- -------- -------- --------
Gross profit 7,368 4,804 13,491 9,511
-------- -------- -------- --------
Operating expenses:
Research and development 2,779 2,633 5,542 5,531
Selling 2,675 2,402 5,297 4,603
General and administrative 2,200 2,501 4,709 5,258
Intangible asset amortization 276 342 582 683
-------- -------- -------- --------
7,930 7,878 16,130 16,075
-------- -------- -------- --------
Operating loss (562) (3,074) (2,639) (6,564)
Non-operating expense, net (368) (1,169) (768) (1,636)
-------- -------- -------- --------
Loss before income taxes (930) (4,243) (3,407) (8,200)
Income tax benefit - - - -
-------- -------- -------- --------
Net loss $ (930) $ (4,243) $ (3,407) $ (8,200)
======== ======== ======== ========
Basic and diluted loss per share $ (0.03) $ (0.17) $ (0.13) $ (0.33)
======== ======== ======== ========
Shares used in basic and diluted
per share calculations 27,094 24,918 27,038 24,889
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenue
Satellite $ 11,416 $ 9,964 $ 21,943 $ 19,213
Wireless DataCom 18,074 13,976 33,893 27,727
-------- -------- -------- --------
Total revenue $ 29,490 $ 23,940 $ 55,836 $ 46,940
Gross profit
Satellite $ 1,145 $ 331 $ 1,938 $ 758
Wireless DataCom 6,223 4,473 11,553 8,753
-------- -------- -------- --------
Total gross profit $ 7,368 $ 4,804 $ 13,491 $ 9,511
======== ======== ======== ========
Operating income (loss)
Satellite $ 31 $ (728) $ (239) $ (1,345)
Wireless DataCom 618 (1,299) 111 (2,943)
Corporate expenses (1,211) (1,047) (2,511) (2,276)
-------- -------- -------- --------
Total operating loss $ (562) $ (3,074) $ (2,639) $ (6,564)
======== ======== ======== ========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2010 2010
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 4,051 $ 2,986
Accounts receivable, net 13,650 16,520
Inventories 11,987 10,608
Deferred income tax assets 2,161 2,656
Prepaid expenses and other current assets 4,551 4,720
------------ ------------
Total current assets 36,400 37,490
Equipment and improvements, net 2,087 2,055
Deferred income tax assets, less current
portion 9,686 10,017
Intangible assets, net 4,562 5,144
Other assets 1,783 2,247
------------ ------------
$ 54,518 $ 56,953
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Bank working capital line of credit $ 7,799 $ 5,901
Accounts payable 15,158 16,186
Accrued payroll and employee benefits 2,572 2,742
Deferred revenue 5,097 4,740
Other current liabilities 2,642 3,526
------------ ------------
Total current liabilities 33,268 33,095
------------ ------------
Long-term debt 4,315 4,170
Other non-current liabilities 546 489
Stockholders' equity:
Common stock 281 277
Additional paid-in capital 152,046 151,453
Accumulated deficit (135,072) (131,665)
Accumulated other comprehensive loss (866) (866)
------------ ------------
Total stockholders' equity 16,389 19,199
------------ ------------
$ 54,518 $ 56,953
============ ============
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
------------------
2010 2009
-------- --------
Cash flows from operating activities:
Net loss $ (3,407) $ (8,200)
Depreciation and amortization 1,253 1,283
Stock-based compensation expense 1,004 858
Amortization of debt issue costs and discount 268 -
Loss on sale of investment - 1,008
Deferred tax assets, net 807 -
Changes in operating working capital 104 8,567
Other 9 23
-------- --------
Net cash provided by operating activities 38 3,539
-------- --------
Cash flows from investing activities:
Capital expenditures (712) (544)
Proceeds from sale of investment - 992
Collections on note receivable 229 150
Other - (36)
-------- --------
Net cash (used in) provided by investing
activities (483) 562
-------- --------
Cash flows from financing activities:
Net proceeds from line of credit borrowing 1,898 1,000
Debt repayments - (7,683)
Taxes paid related to net share settlement of vested
equity awards (388) (105)
-------- --------
Net cash provided by (used in) financing
activities 1,510 (6,788)
-------- --------
Effect of exchange rate changes on cash - 175
-------- --------
Net change in cash and cash equivalents 1,065 (2,512)
Cash and cash equivalents at beginning of period 2,986 6,913
-------- --------
Cash and cash equivalents at end of period $ 4,051 $ 4,401
======== ========
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 Pretax Loss to Adjusted
Basis (non-GAAP) Net Loss is as follows:
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
GAAP basis pretax loss $ (930) $ (4,243) $ (3,407) $ (8,200)
Amortization of intangible assets 276 342 582 683
Stock-based compensation expense 481 446 1,004 858
-------- -------- -------- --------
Pretax income (loss) (non-GAAP
basis) (173) (3,455) (1,821) (6,659)
Income tax benefit (non-GAAP basis)
(a) 20 1,193 604 2,048
-------- -------- -------- --------
Adjusted basis (non-GAAP) net loss $ (153) $ (2,262) $ (1,217) $ (4,611)
======== ======== ======== ========
Adjusted basis net loss per diluted
share $ (0.01) $ (0.09) $ (0.05) $ (0.19)
Weighted average common shares
outstanding on diluted basis 27,094 24,918 27,038 24,889
(a) The non-GAAP income tax benefit is computed using the Company's
combined U.S. federal and state statutory tax rate of 40.0% and 40.7%
in fiscal 2011 and 2010, respectively, 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.
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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