CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless
products, services and solutions, today reported results for its
fiscal third quarter ended November 30, 2010. Key elements include:
-- Consolidated third quarter revenues of $29.6 million; wireless datacom
third quarter revenues up 52% year-over-year to $21.2 million.
-- Consolidated gross margin percentage of 26.1%, up from 19.2% in third
quarter of prior year.
-- GAAP net loss of $0.2 million, or $0.01 loss per diluted share;
Adjusted Basis (non-GAAP) net income of $0.4 million, or $0.01 per
diluted share; both within guidance.
-- Third quarter net cash provided by operations of $0.8 million.
Commenting on the third quarter performance, Rick Gold, CalAmp's
Chief Executive Officer, said, "Strong growth in our wireless
datacom business drove our first quarterly operating profit in
nearly four years. At $21.2 million, wireless datacom revenue grew
by 17% on a sequential quarter basis and 52% year-over-year. We are
experiencing strong demand for our mobile resource management (MRM)
products from a broad base of customers in local fleet management
and vehicle finance, as well as emerging applications such as
remote car start. We are also seeing growth in our wireless
networks products with significant revenue contributions in the
third quarter from previously announced projects in the public
safety and rail transportation sectors. In the energy sector, we
are making good progress on a number of pilot projects for Smart
Grid infrastructure applications and expect the first of these to
begin system deployment in early fiscal 2012."
Mr. Gold continued, "While our wireless datacom business has
generated significant momentum in fiscal 2011, our satellite
business remains depressed. Introduction of new products is not
occurring as rapidly as we had expected, primarily due to evolving
customer requirements. In addition, demand for the legacy satellite
products that we currently supply has been soft. We are continuing
to work with our customers to qualify new products and expect
demand for both legacy and new products to pick up in the first
half of fiscal 2012."
Fiscal 2011 Third Quarter Results
Total revenue for the fiscal 2011 third quarter was $29.6
million compared to $30.7 million for the third quarter of fiscal
2010 as higher revenues in the Company's wireless datacom segment
were offset by lower satellite segment revenues. Wireless datacom
revenue increased 52% to $21.2 million from $13.9 million in the
same period last year, while satellite revenue decreased to $8.4
million from $16.8 million in the same period last year.
Consolidated gross profit for the fiscal 2011 third quarter was
$7.7 million, or 26.1% gross margin, compared to gross profit of
$5.9 million, or 19.2% gross margin, for the same period last year.
The increases 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 third quarter as
determined in accordance with U.S. generally accepted accounting
principles ("GAAP") was a net loss of $0.2 million, or $0.01 per
diluted share, compared to a net loss of $1.3 million, or $0.05 per
diluted share, in the third quarter of last year.
The Adjusted Basis (non-GAAP) net income for the fiscal 2011
third quarter was $0.4 million, or $0.01 per diluted share,
compared to Adjusted Basis net income of $0.1 million, or zero
cents per diluted share, for the same period last year. The
Adjusted Basis net income (loss) excludes the impact of
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 the Adjusted Basis net income (loss) is provided in the table at
the end of this press release.
Liquidity
At the end of the third quarter, the Company had total cash of
$4.3 million and total debt of $11.7 million. Total debt at that
date consisted of $7.3 million drawn under the Company's revolving
bank credit facility and subordinated debt of $4.4 million. The
unused borrowing capacity on the bank revolver was $2.0 million at
November 30, 2010. Net cash provided by operating activities during
the three- and nine-month periods ended November 30, 2010 was
$768,000 and $806,000, respectively.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said,
"Looking ahead, we expect to see fiscal fourth quarter consolidated
revenues in the range of $28 to $32 million, with wireless datacom
revenues continuing to grow and satellite revenues slightly down
from the third quarter. We expect GAAP Basis net income (loss) in
the range of a $0.03 loss to $0.01 income per diluted share. The
Adjusted Basis (non-GAAP) net income (loss) for the fourth quarter
is expected to be in the range of a $0.01 loss to $0.03 income per
diluted share. Looking further ahead to the first half of fiscal
2012, based on our current backlog and pipeline of opportunities,
we expect our satellite shipments to begin rebounding and expect
continued strength in our wireless datacom segment."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal
2011 third 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, President Michael Burdiek and CFO Rick Vitelle will host
the conference call. Participants can dial into the live conference
call by calling 877-941-2332 (480-629-9722 for international
callers). An audio replay will be available through January 11,
2011, by calling 800-406-7325 (303-590-3030 for international
callers) and entering the access code 4394709.
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 datacom 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 Nine Months Ended
November 30, November 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenues $ 29,553 $ 30,692 $ 85,389 $ 77,632
Cost of revenues 21,854 24,795 64,199 62,224
-------- -------- -------- --------
Gross profit 7,699 5,897 21,190 15,408
-------- -------- -------- --------
Operating expenses:
Research and development 2,733 2,726 8,275 8,257
Selling 2,573 2,517 7,870 7,120
General and administrative 1,981 2,753 6,690 8,011
Intangible asset amortization 275 342 857 1,025
-------- -------- -------- --------
7,562 8,338 23,692 24,413
-------- -------- -------- --------
Operating income (loss) 137 (2,441) (2,502) (9,005)
Non-operating expense, net (316) (252) (1,084) (1,888)
-------- -------- -------- --------
Loss before income taxes (179) (2,693) (3,586) (10,893)
Income tax benefit - 1,374 - 1,374
-------- -------- -------- --------
Net loss $ (179) $ (1,319) $ (3,586) $ (9,519)
======== ======== ======== ========
Basic and diluted loss per share $ (0.01) $ (0.05) $ (0.13) $ (0.38)
======== ======== ======== ========
Shares used in basic and diluted
per share calculations 27,321 25,015 27,133 24,931
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenue
Satellite $ 8,373 $ 16,802 $ 30,316 $ 36,015
Wireless DataCom 21,180 13,890 55,073 41,617
-------- -------- -------- --------
Total revenue $ 29,553 $ 30,692 $ 85,389 $ 77,632
======== ======== ======== ========
Gross profit
Satellite $ 191 $ 1,647 $ 2,129 $ 2,405
Wireless DataCom 7,508 4,250 19,061 13,003
-------- -------- -------- --------
Total gross profit $ 7,699 $ 5,897 $ 21,190 $ 15,408
======== ======== ======== ========
Operating income (loss)
Satellite $ (762) $ 494 $ (1,001) $ (851)
Wireless DataCom 1,935 (1,848) 2,046 (4,791)
Corporate expenses (1,036) (1,087) (3,547) (3,363)
-------- -------- -------- --------
Total operating income (loss) $ 137 $ (2,441) $ (2,502) $ (9,005)
======== ======== ======== ========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
November 30, February 28,
2010 2010
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 4,251 $ 2,986
Accounts receivable, net 13,049 16,520
Inventories 9,760 10,608
Deferred income tax assets 2,161 2,656
Prepaid expenses and other current assets 5,123 4,720
----------- -----------
Total current assets 34,344 37,490
Equipment and improvements, net 1,927 2,055
Deferred income tax assets, less current portion 9,686 10,017
Intangible assets, net 4,287 5,144
Other assets 1,803 2,247
----------- -----------
$ 52,047 $ 56,953
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Bank working capital line of credit $ 7,299 $ 5,901
Accounts payable 12,257 16,186
Accrued payroll and employee benefits 2,773 2,742
Deferred revenue 5,050 4,740
Other current liabilities 2,953 3,526
----------- -----------
Total current liabilities 30,332 33,095
----------- -----------
Long-term debt 4,387 4,170
Other non-current liabilities 578 489
Stockholders' equity:
Common stock 281 277
Additional paid-in capital 152,586 151,453
Accumulated deficit (135,251) (131,665)
Accumulated other comprehensive loss (866) (866)
----------- -----------
Total stockholders' equity 16,750 19,199
----------- -----------
$ 52,047 $ 56,953
=========== ===========
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
------------------
2010 2009
-------- --------
Cash flows from operating activities:
Net loss $ (3,586) $ (9,519)
Depreciation and amortization 1,860 1,906
Stock-based compensation expense 1,559 1,416
Amortization of debt issue costs and discount 402 -
Loss on sale of investment - 1,008
Deferred tax assets, net 807 -
Changes in operating working capital (245) 9,534
Other 9 24
-------- --------
Net cash provided by operating activities 806 4,369
-------- --------
Cash flows from investing activities:
Capital expenditures (884) (835)
Proceeds from sale of investment - 992
Collections on note receivable 348 225
Other - (36)
-------- --------
Net cash (used in) provided by investing
activities (536) 346
-------- --------
Cash flows from financing activities:
Net proceeds from line of credit borrowing 1,398 1,650
Debt repayments - (8,808)
Taxes paid related to net share settlement of vested
equity awards (403) (123)
-------- --------
Net cash provided by (used in) financing
activities 995 (7,281)
-------- --------
Effect of exchange rate changes on cash - 168
-------- --------
Net change in cash and cash equivalents 1,265 (2,398)
Cash and cash equivalents at beginning of period 2,986 6,913
-------- --------
Cash and cash equivalents at end of period $ 4,251 $ 4,515
======== ========
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 Nine Months Ended
November 30, November 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
GAAP basis pretax loss $ (179) $ (2,693) $ (3,586) $(10,893)
Amortization of intangible assets 275 342 857 1,025
Stock-based compensation expense 555 558 1,559 1,416
-------- -------- -------- --------
Pretax income (loss) (non-GAAP
basis) 651 (1,793) (1,170) (8,452)
Income tax benefit (provision)
(non-GAAP basis) (a) (286) 1,894 317 3,942
-------- -------- -------- --------
Non-GAAP net income (loss) $ 365 $ 101 $ (853) $ (4,510)
======== ======== ======== ========
Non-GAAP net income (loss) per
diluted share $ 0.01 $ - $ (0.03) $ (0.18)
Non-GAAP weighted average common
shares outstanding
on diluted basis 27,887(b) 25,015 27,133 24,931
(a) The non-GAAP income tax benefit (provision) is computed using the
Company's combined U.S. federal and state statutory tax
rate of 40.0% 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.
(b) Includes the dilutive effect for non-GAAP earnings purposes of 566K
shares related to options, warrants, restricted stock and
restricted stock units.
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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